april 2010 ethanol producer magazine

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ETHANOL PRODUCER MAGAZINE April 2010 4

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vol. 16 no. 4

44 CORNGumming up the Works Widespread wet corn presents challenges to ethanol producers, from too little dryer capacity to molds and corn dried at too high temperatures.–By Holly Jessen

50 POLICYSetting Boundaries with the Low Carbon Fuel Standard Ethanol headed to California must be registered with CARB beginning in July. Many details still need to be worked out. –By Anna Austin

56 EMISSIONSMeasured Expectations EPA’s new GHG reporting rules excluded ethanol as a source category for now, yet many plants will need to report their stationary combustion sources. –By Kris Bevill

62 RACINGEthanol: Growing It, Burning It and Breaking Records An Oklahoma farmer and self-proclaimed set a land speed record by optimizing his Mustang to burn E85.–By Luke Geiver

features

contents

Ethanol Producer Magazine: (USPS No. 023-974) April 2010, Vol. 16, Issue 4. Ethanol Producer Magazine is published monthly. Principal Of-fi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

8 Editor’s Note Sign of a New Era By Susanne Retka Schill

9 Advertiser Index

10 Events Calendar

14 The Way I See It The Right Strategy at the Right Time By Mike Bryan

16 View From the Hill Ethanol’s Agenda Item No.1: Extend the Tax Incentives By Bob Dinneen

18 Drive Ethanol-Optimized Engine A Major Breakthrough for Producers By Tom Buis

20 eBio Where is the Consistency? By Robert Vierhout

22 Taking Stalk Stepping up Sorghum Use By Bill Greving

24 Legal Perspective Reorganization and Investment Opportunities in the Ethanol Industry By Bradley R. Kruse

26 Business & People

28 Commodities

30 BIObytes

32 Industry News

74 Marketplace

departments

contents

6

contributions

68

72

68 DEHYDRATION Methods for Expanding Ethanol Dehydration Debottlenecking by targeting the right improvements expands production and optimizes energy use.–By Felipe Tavares, Jansley Pascoal and Bruno Maia

72 INTELLECTUAL PROPERTY Next-Generation Biofuels: Establishing, Protecting and Profi ting from Technology RightsTrade secrets and patents are both legally protected and must be handled correctly.–By Charles Richard

ETHANOL PRODUCER MAGAZINE April 2010

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Sign of a New Era

ne could almost hear a sigh of relief emanating from the Heartland when the fi nal rule for the renewable fuels standard became public. The draconian impacts of the U.S. EPA’s proposed rule have been sidestepped. We report the basics of the news in this issue and will explore its implications further next month. The EPA struck a balance between competing interests. The environmentalists appear to be satisfi ed with the rule, based on the initial press releases

we saw and the lack of a media outcry following the Feb. 3 release. After all, it took the New York Times a week to get around to an editorial on the new rule, which it headlined “Sensible Rules for Ethanol.”

The fi nal rule was simultaneously posted to the EPA Web site and announced at a news conference of cabinet heads releasing the strategy to move biofuels forward in order to meet the 36 billion gallon target by 2022. The administration’s Biofuels Interagency Working Group made up of the EPA, U.S. DOE and USDA revealed a strategy that is strongly pro-biofuels, with an explicit acknowledgement that ad-vanced biofuels will be built upon a healthy conventional biofuel sector.

“To reach and exceed our biofuels targets, we will need to take a new strategic approach that contin-ues to support the existing biofuels industry and accelerates the creation and rapid commercial deploy-ment of new technologies so our nation’s efforts to establish an advanced biofuels industry are met,” says the working group’s document titled, “Growing America’s Fuel—An Innovation Approach to Achieving the President’s Biofuels Target.”

Success in meeting these targets would bring many benefi ts to the United States, the administration strategy says, “including new jobs and greater economic vitality in rural America, increased energy inde-pendence, reduced economic vulnerability to volatile oil prices and uncertain supplies, technological and industrial leadership in renewable biofuels, and reduced global warming pollution. In short, America will be in fi rmer control of its energy future.”

A notable feature in the strategy is an acknowledgement that the strategy will be regional in nature. In fact, the recognition of regionalization may be the most signifi cant feature, if it indeed signals a shift in policy approach to not attempt to make one policy fi t all situations. In other words, corn ethanol makes sense in the Midwest. The strategy should be to stimulate use of E85 in that region. In the Southeast, it makes sense to work on advanced biofuels based on energy cane or woody resources. “Having such regional strategies will allow logistics and transportation systems to be optimized, as well as expand new supply chain opportunities across rural America,” the working group document says. Realizing the prom-ise of a new era in agriculture through renewable fuels in a thriving bio economy will require just this sort of regional optimization.

Speaking of new eras, let me introduce the new EPM team. In January, I became editor of Ethanol Producer Magazine. Former editor Kris Bevill and associate editor Erin Voegele are leading the launch of a new magazine from BBI International, Industrial GHG Solutions. The expertise they’ve gained in re-porting EPA policy and greenhouse gas issues for this magazine will be expanded to cover the topic and emerging industry surrounding the monitoring and mitigation of greenhouse gases. Replacing them on the EPM staff are Holly Jessen and Luke Geiver. With the help of our colleagues at BBI International, we will continue the company tradition of covering the ethanol industry in depth. We welcome your feedback, news tips and industry insights.

Susanne Retka Schill, [email protected]

O

Susanne Retka Schill Editor's Note

w w w . E t h a n o l P r o d u c e r . c o m

A R T

E D I T O R I A L

P U B L I S H I N G & S A L E S

Mike Bryan

Joe Bryan

Tom Bryan

Matthew Spoor

Howard Brockhouse

Jeremy Hanson

Marty Steen

Bob Brown

Gary Shields

Jessica Beaudry

Jason Smith

Marla DeFoe

[email protected]

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Executive Account [email protected]

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Ethanol Producer Magazine is now free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscrip-tions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367.

Select back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or [email protected]. Article reprints are also available for a fee.

For advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.

We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 308 Second Avv. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected]. Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.

SUBSCRIPTIONS

BACK ISSUES AND REPRINTS

ADVERTISING

LETTERS TO THE EDITOR

Please send correspondence to:Ethanol Producer Magazine

308 Second Ave. N., Suite 304Grand Forks, ND USA 58203

Phone: (701) 746-8385Fax: (701) 738-4927

Advertising information online:www.EthanolProducer.com

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10 ETHANOL PRODUCER MAGAZINE • April 2010

Advanced Biofuels WorkshopJune 14, 2010America’s CenterSt. Louis, MissouriIn its third year, this BBI International one-day work-shop focusing on advanced biofuels will be co-lo-cated with the Fuel Ethanol Workshop & Expo to be held June 14 to 17 in St. Louis. The full range of advanced biofuels from biomass-based diesels to cellulosic ethanol and other biofuels will be covered in workshops dealing with research, project devel-opment, feedstock development, environmental performance and more.

www.advancedbiofuelsworkshop.com

2010 Farm to Fuel SummitAugust 11-13, 2010Rosen Shingle CreekOrlando, FloridaThis fi fth annual summit is an opportunity for indus-try leaders and stakeholders to learn, network and strategize to advance the development of renew-able energy in Florida. Florida’s Farm to Fuel initia-tive was developed to promote the production and distribution of renewable energy from Florida-grown crops, agricultural wastes and other biomass. More than 500 attendees from academia, industry and government participated in last year’s summit.

www.fl oridafarmto

Future Energy Conference: The Business of Renewable Energy & Effi ciencyApril 21-22, 2010Oregon Convention CenterPortland, OregonThe conference will focus on project developers, service and equipment providers, energy end users, utilities, government and others involved in building the new energy economy.

www.futureenergyconference.com/

International Biomass Conference & ExpoMay 4-6, 2010Minneapolis Convention CenterMinneapolis, MinnesotaThis Biomass Magazine-sponsored conference will unite current and future producers of biomass-de-rived power, fuels and chemicals with waste genera-tors, energy crop growers, municipal leaders, utility executives, technology providers, equipment manu-facturers, project developers, investors andpolicymakers. Future and existing biofuels and bio-mass power producers will be able to network with waste generators and other industry suppliers and technology providers as well as utility executives, researchers, policymakers, investors, project devel-opers and farmers.

www.biomassconference.com

EVENTS CALENDAR

Corn Utilization and Technology ConferenceJune 7-9, 2010 Atlanta HiltonAtlanta, GeorgiaThe program has been expanded to include current topics related to corn, such as land use issues and greenhouse gas emissions, aquifers, water quality and usage in corn agriculture, life-cycle analyses of new technologies and plenary sessions addressing these issues. The program will include sessions on wet and dry milling processes, biocatalysts, gene transformation technology, health and nutrition, unique specialty corns, new products and revenue streams.

www.corntechconf.org

International Fuel Ethanol Workshop & ExpoJune 14-17, 2010America’s CenterSt. Louis, MissouriThis Ethanol Producer Magazine-sponsored con-ference provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business en-vironment. It is the largest, longest-running ethanol conference in the world. The event delivers timely presentations with a strong focus on commercial-scale ethanol production, new technology, and near-term research and development.

www.fuelethanolworkshop.com

10 ETHANOL PRODUCER MAGAZINE April 2010

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The Way I See It

The Right Strategy at the Right TimeAn enormous amount has been written about the

fi nal rule for the renewable fuel standard (RFS2) and the statements from the White House in support of biofu-els development. One thing that has not been written about—and perhaps can only be fully appreciated by those who have been involved in the ethanol industry for many years—is, in a word, progress!

My tenure goes back 26 years, others go back even further. Over the years, the battles that have been fought on state and federal levels could fi ll volumes. It seems at times that we take two steps forward and three steps backwards, but when one looks at the span of the past 25 years, it’s clear that the major direction has always been forward.

Those opposed to ethanol have driven more stakes in its heart than a bad Dracula movie. But you just can’t kill an idea whose time has come. The slash and burn tactics used by ethanol detractors have failed time and time again. They have failed because ethanol is the right strategy at the right time in history.

We certainly applaud the commitment to biofuels demonstrated by the Obama administration. The words of vindication contained in the RFS2 will go far to help establish ethanol as a future fuel. The reality, however,

is, that when faced with the al-ternative of “more oil” or do-mestically produced fuel, even with its blemishes, what other choice do we really have? As strategies are being feverously drafted to reduce our GHG emissions, improve our en-ergy security, and get people back to work here in Ameri-ca, I ask again, do we choose more oil or domestically produced clean energy?

History is replete with failures, but seldom does something fail when it addresses a fundamental problem. Ethanol addresses a fundamental problem facing Ameri-ca and the world, the need for clean, home-grown energy. Of all the seemingly unsolvable problems that the world faces, energy does not have to be one of them. We have solutions to our energy needs. Not just one solution, but multiple solutions. It’s time we unanimously adopt those solutions, and move on to other problems that are far more pressing.

That’s the Way I See It!

Mike BryanChairman

[email protected]


VIEW FROM THE HILL

Ethanol’s Agenda Item No.1: Extend the Tax Incentives

On the heels of what I consider to be the best National Ethanol Conference the Renewable Fuels Association has ever hosted, the industry is re-ener-gized, recommitted and refocused on the challenges at hand. The return to modest profi tability, the imple-mentation of the renewable fuels standard and the end to the general malaise throughout the economy all contributed to a sense of guarded optimism at the February conference in Orlando, Fla. Still, this op-timism did not and cannot tint the glasses through which this industry views the year ahead.

Addressing expanded ethanol blending, growing infrastructure needs, and the methodology by which carbon is counted, will all require the collective efforts of the industry. Important as these issues are, there is no issue of greater importance on Capitol Hill this year for the ethanol industry than a long-term exten-sion of the tax incentives for all sources of ethanol.

The expiration of the Volumetric Ethanol Excise Tax Credit and the corresponding secondary tariff on imports at the end of 2010 must be avoided. To understand the importance of these policies to etha-nol, one needs look only to the biodiesel industry. As I stated in the State of the Industry address at the NEC, “This CANNOT be us!”

To be sure, extending the tax incentives for all ethanol will not be easy. Many opponents of ethanol simply don’t believe that America should be develop-ing domestic, renewable industries to challenge the monopoly of petroleum. Others question the neces-sity of tax incentives when a mandate is already in place. Adding confusion and uncertainty is the polar-ized and dysfunctional climate in Congress, ampli-fi ed by looming elections in November. Moving ap-propriate legislation forward will be no small feat as gridlock is likely to be the norm in 2010.

These hurdles are not insurmountable and can-

not prevent the industry from aggressively pursuing its goals. Continuing the tax incentive available to oil companies who blend ethanol is a critical policy un-derpinning of the Obama administration’s stated goal to realize America’s biofuel potential.

First, as the example of the biodiesel industry demonstrates, tens of thousands of jobs are at stake. It isn’t a question of whether ethanol will be used—the RFS requires it. The real question is from where will the ethanol come? In a time of economic uncer-tainty, it would seem foolish and shortsighted to put at risk the well-paying jobs of tens of thousands of Americans in favor of imports of ethanol from coun-tries with less stringent worker rights than the U.S., to put it diplomatically.

Second, the tax incentive makes fi scal sense. In a straight dollars in/dollars out comparison, the etha-nol industry returned $3.4 billion MORE to the federal treasury than was spent in the VEETC in 2009, not to mention tax revenue generated in states and com-munities across the country, nor the savings from fewer oil imports.

Third, the renewable fuels standard is a fl oor, not a ceiling. Making the RFS the be-all end-all for renewable fuel use would handcuff the innovation by Americans seeking renewable energy answers to our fossil fuel addiction. Removing the market-based incentives for increased ethanol use effectively caps the market and discourages the very innovation that the country demands.

This is not the last time my column this year will touch on this issue that is of critical importance to the future of the industry. I encourage all of you to contact the RFA with your questions, reach out to your members of Congress, and continue being the unmitigated and unmatched force unlocking the po-tential of America’s renewable fuel potential.

Bob DinneenPresident and CEO

Renewable Fuels Association

Since 1981, the Renewable Fuels Association (RFA) has been the

authoritative voice of the ethanol industry. Our efforts have yielded an unequaled record of legislative and

regulatory victories. But we consider our track record just the beginning, and are expanding our efforts with a

focus on market development.

The RFA is a trusted source for reliable

the industry, policymakers, and media alike. The RFA is the leading expert on ethanol standards and guidelines

for safety. We are also the preeminent authority on E10 and E85.

The RFA is a member-centered, member-driven organization. Join

with us to help build a strong future for the industry. For more

information, visit www.ethanolrfa.org, or call (202) 289-3835.

Renewable Fuels Association, One Massachusetts Avenue NW - Suite 820 - Washington, DC 20001 - (202) 289-3835.

RFAThe voice of the ethanol industry.


t Growth Energy, we are constantly looking for new ways to demonstrate the opportunities do-mestic ethanol provides our nation. We saw a major opportunity emerge earlier this winter,

when Growth Energy and Ricardo Systems, a global leader in engine innovation, unveiled a 10-month joint project to demonstrate that engines designed specifi cally for ethanol can match regular gasoline and diesel for both fuel effi ciency and power performance.

This is an enormous breakthrough for our industry. The Growth Energy-Ricardo project will prove that ethanol is a vi-able fuel—that its unique fuel properties, particularly its high-octane and high-oxygen levels, coupled with its low-carbon, renewable and sustainable qualities, make it the fuel of the future.

In short, the Growth Energy-Ricardo project will dem-onstrate that engine technology can fi nally catch up with fuel technology.

Ricardo’s ethanol boost direct injection (EBDI) engine is designed to burn any mix of ethanol and gas up to E85. The engine block is half the weight of a traditional diesel engine, which can allow as much as an additional 500 pounds of payload for a traditional V6. In fact, Ricardo engineers told me that the more weight the engine is pulling, the greater the power the ethanol can provide the engine. And, at blends of E40 to E50, the EBDI engine improves on the fuel economy of regular gasoline engines by as much as 10 percent. Think about that: One of the biggest criticisms of ethanol is that engines lose mileage when burning ethanol. But this engine proves that the problem isn’t the fuel—it’s the engine. An en-gine designed specifi cally to burn ethanol, as opposed to a gasoline engine that is burning ethanol, can tap those fuel qualities that make ethanol a desirable alternative to fossil fuels.

To demonstrate the full potential of this new technology, our two companies will be putting the EBDI engines into a pair of heavy-duty pickup trucks. Those trucks will be run through the usual kinds of rigors of everyday driving around the country. That includes highway cruising, stop-and-go city driving, and hauling heavy payloads. Our intention is to prove that a variety of ethanol blends, used as a fuel in the ethanol-optimized engine, make ethanol a terrifi c replace-ment for both regular gasoline and diesel.

Growth Energy and Ricardo shared a booth at the Washington, D.C., Auto Show in late January, and held a press conference to announce the project. The story was picked up by an array of automotive industry newspapers and media outlets, and major news outlets including USA Today, the Wall Street Journal and “Voice of America.”

We all know why domestic ethanol is an effective alter-native to gasoline refi ned from foreign oil. Ethanol is renew-able. We will never run out as long as we can farm or turn waste like corn stover or woodchips into cellulosic ethanol. As a domestic fuel, ethanol makes us less dependent on for-eign oil, and that, in turn, makes our nation less susceptible to cartel-driven price shocks to our economy. And, ethanol creates jobs—particularly, well-paying jobs in our smaller, rural communities where we need to create the kind of jobs that can keep our young people at home.

So look for more information about the Growth Energy-Ricardo engine project on our Web site and in the news. You may even see one of our EBDI-powered pickup trucks in your town this year.

Tom Buis is CEO of Growth Energy, www.growthenergy.org.

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Where is the Consistency?By Robert Vierhout

n 2008 and 2009 when the European regulators were dis-cussing the criteria that would constitute a sustainability scheme for biofuels and bioliquids (a biofuel used for electric-ity production), the general feeling was that this was just the fi rst step. Next would be the sustainability of biomass used

for electrical generation, heating and cooling. Once this all was in place, the next big step would be sustainability criteria for all agricultural crops whatever their end-use—food, feed and fi ber, alike. Perhaps one day, even oil would have to be produced in a sustainable way with the result of stopping non conventional oil production.

Thus, it was no surprise that in the fi nal law on renewable energy the European Commission was instructed to determine whether a sustainability scheme for energy uses for biomass was needed, based on the best available scientifi c evidence. The re-port was due in December and, though still not out, a recently leaked draft has taken many by surprise. The message is clear: no obligatory European sustainability scheme for biomass. The same EC department that designed the law on biofuels, strangely enough, only “recommends” the use of sustainability schemes for biomass.

The argument for this liberal approach is that “the current legal framework gives certain assurances of sustainable use of biomass for energy produced in the EU.” The commission also acknowl-edges that imports of biomass will grow substantially in the years to come if Europe wants to fulfi ll its targets on renewable energy. It is precisely the non-EU origin of the biomass that concerns many, knowing that the EU legal framework on forest management does not apply outside Europe. It therefore doesn’t make sense to take such a liberal approach.

If I remember right, the reason for setting up a detailed and rather bureaucratic sustainability scheme for biofuels was precise-ly the need to guarantee imports were “good” biofuels. Now, why in

the case of biomass for electricity, heating and cooling is there less reason for concern than in the case of biomass for transport fuel? It beats me. Why the inconsistency? Is it because of the higher greenhouse gas saving that burning of biomass achieves? Are there no land use problems when growing biomass for those other end uses? Is potential deforestation no longer an issue?

It seems to me the same risk of unsustainable production of biomass occurs if the biomass is used for electricity, heating and cooling, even within the EU, and a consistent, rigorous sustainabil-ity scheme makes sense.

There are two other reasons why it makes sense.Similar products should be treated equally under the law.

Consider a farmer growing maize (corn) with a buyer who wants to make biofuel. The farmer needs to track fertilizer use, previous crops on the land, water use, etc., with all to be certifi ed by an independent auditor. If, however, the buyer will use the maize for making biogas to produce electricity there are no requirements. The choice of the farmer seems obvious unless he receives a nice premium from the biofuel producer. It is clear that the biofuel pro-ducer will not operate in a level playing fi eld.

The second reason to be consistent is that if politicians and EU member states ultimately agree with the commission, we will miss an opportunity in further applying principles of sustainability. If indeed we feel that all crops need to be grown sustainably, and if indeed we believe that oil needs to be produced sustainably, we should not stop with biofuels.

If we do not have the nerve to enlarge the scope for the use of sustainability schemes beyond biofuels, then one can only con-clude that the concept of sustainability perhaps was invented just to make life tough for biofuels. Food for thought, I would say.

Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at [email protected].

I

Vierhout

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enry Ford once said, “You can’t build a reputa-tion on what you are going to do.” Those words ring true for many of us who have witnessed the benefi ts of sorghum as a feedstock in the ethanol production process.

Now, one may feel it’s a stretch to think that such a quote would align us in some way with pizza. Yes, you read it correctly, pizza. But what I’m specifi cally talking about is the recent marketing campaign for Domino’s Pizza.

The Ann Arbor, Mich.-based pizza giant recently re-sponded to criticism that their pizza crust was “bland,” to put it mildly, by launching a makeover campaign to address those concerns. They admitted that an informal survey found some thought that not just the crust, but the sauce, was lacking in fl avor. Domino’s executives took the criti-cism to heart, and as many have seen over the past sev-eral months, launched an advertising campaign touting a new recipe. Some may call it a slick marketing gimmick, but the bottom line is that the company didn’t bury the survey results, or quietly tweak the pizza. They admitted that im-provement was needed.

Rewind to the February issue of Ethanol Producer Magazine reporting the results of a survey United Sorghum Checkoff Program commissioned by Agri-Energy Solu-tions Inc. on the use of sorghum in the ethanol industry. The results were revealing. Some respondents expressed concern that grain sorghum production in the U.S. could not meet its demand potential. For those of us committed to meeting the needs of both ethanol and sorghum producers, this underscored the need for a comprehensive education program. We didn’t bury our heads in the sand. We imple-mented strategy based on these research results.

The Sorghum to Ethanol Plan (STEP) was created to assist sorghum producers in fi nding markets for their crops in ethanol, as well as assist ethanol producers by bring-

ing sorghum growers together and aggregating supplies. Additionally, STEP will work to provide information to all parties on sorghum-to-ethanol, distillers grains, transpor-tation logistics, and more. We believe our goals are well within range: increase the inclusion rate of grain sorghum for ethanol production by 50 percent by 2011 and take ad-vantage of the opportunities that are available for sorghum in ethanol as they exist today.

A focus group of key ethanol plants has been ap-proached to determine the main issues affecting the amount of sorghum in the ethanol production process. The pre-dominant factors associated with the amount of sorghum purchased by ethanol producers include the availability of sorghum to meet their needs, opportunities to bid on sor-ghum, and opportunities to market the distillers grains.

We’re taking the STEP program on the road over the next six months with a series of four meetings being held every 35 days in separate locations. Agri-Energy Solutions Inc. will conduct these meetings along with sorghum check-off staff for sorghum growers and ethanol producers. We’ll also meet with feedlot managers, dairy managers and nu-tritionists to assist in advancing sorghum distillers grains in these most critical markets.

I hope we’ll be visiting a city near you within the Sor-ghum Belt. In Kansas, Garden City, Smith Center and Wichita are on the schedule. In Texas, we’ll hold a meeting in Lubbock.

We’re looking at ways to create a win-win situation for sorghum and ethanol producers. We must work together to advance renewable fuels. To once again cite the words of Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.”

Bill Greving is chairman of the United Sorghum Checkoff Program. Reach him at [email protected].

Stepping up Sorghum UseBy Bill Greving

TAKING STALK

H

Greving

® www.a rgusmed ia .com

Energy Efficiency &Renewable Energy

Thank You to All Our Sponsors!

Climate of Opportunity


Reorganization and Investment Opportunities in the Ethanol Industry By Bradley R. Kruse

he recent successful Chapter 11 reorganization of Pine Lake Corn Processors LP, an ethanol production facility in Steamboat Rock, Iowa, demonstrates the signifi cant protections and benefi ts provided by the Bankruptcy

Code for businesses experiencing fi nancial diffi culties, and the improved overall strength of the ethanol industry.

In December 2008, having lost its operating line of credit, and with poor crush spreads leaving little or no profi t margin, Pine Lake was forced to cease production and fi le for protection under Chapter 11 of the Bankruptcy Code. However, through the hard work and loyalty of its employees and management, coupled with improving crush spread margins and the cooperation of certain of its creditors, Pine Lake was able to use the tools provided by the code to promptly restart its production of ethanol and to ultimately complete a successful reorganization of its business.

A key component to Pine Lake’s success and one of the cornerstones of bankruptcy law are the automatic stay provi-sions, which generally prevent creditors from taking any action to collect a debt against the debtor or to obtain possession of the debtor’s property. The benefi t of the automatic stay is that it provides debtors with much needed breathing room in order to allow them to reorganize their business affairs, restructure their fi nancing arrangements, and seek new investments. Because of the automatic stay, Pine Lake was afforded the opportunity to delay payment on outstanding unsecured debt obligations and continue its business operations while crush spreads and its cash fl ow improved.

Another key component is the executory contract provisions which allow a debtor to reject (i.e., terminate) existing contracts which the debtor deems unfavorable or unprofi table. In Pine Lake’s case, these provisions enabled Pine Lake to reject a num-

ber of unprofi table forward contracts for the purchase of corn. The code also contains provisions that require parties to

promptly pay the debtor any outstanding debts or otherwise to turn over to the debtor any of the debtor’s property. These provi-sions were especially helpful to Pine Lake in expediting the pay-ment of various large receivables that provided much needed operating capital.

Other provisions of the code enable a debtor to propose a plan of reorganization that extends the maturity date and/or changes interest rates or any other terms of outstanding secu-rities. Pine Lake used these provisions to modify the maturity dates and interest rates of its loan and credit facilities, thereby providing it with signifi cantly increased cash fl ow.

In addition, many other provisions in the code provide trou-bled companies with powerful tools with which to solve their fi -nancial diffi culties. Other provisions also provide potential inves-tors or purchasers of assets with benefi ts and protections not available outside of bankruptcy, such as the ability to purchase assets free and clear of existing liens, claims and encumbrances. With crush spreads much improved over what they were in late 2008 and early 2009, there is improved opportunity and options for ethanol producers experiencing fi nancial diffi culty to success-fully reorganize their businesses, as well as for potential inves-tors and purchasers of ethanol assets to utilize provisions of the Bankruptcy Code to their advantage.

Bradley R. Kruse is a member of the bankruptcy and renewable fuels practice groups at BrownWinick Law Firm, and was lead re-organization counsel to Pine Lake Corn Processors in its Chapter 11 reorganization. He can be reached at (515) 242-2460 or [email protected].

T

Kruse

LEGAL PERSPECTIVE


ScottMadden Inc. and Ascendant Partners Inc. have joined forces to help renewable energy companies secure proj-ect fi nancing, combining Scott-Madden’s energy and clean tech expertise with Ascendant Part-ners’ experience in project fi -nance. Both fi rms have worked on numerous U.S. DOE and USDA loan guarantee applica-tions, advanced energy tax cred-its and other production and in-vestment tax credit applications. In addition to their application experience, they are certifi ed loan application reviewers for the DOE. The fi rms have de-veloped detailed meth-odologies, templates and work plans for each of the DOE and USDA funding mechanisms, which elimi-nates the guesswork and errors while signifi cantly improving the effi ciency of the process, according to the announcement of the joint initiative.

Greenergy Interna-tional Ltd., a UK biofuels sup-plier, and Bauche Group, a France-based agricultural com-modities business, have a new joint venture to sell sustainable Brazilian ethanol in Europe. Greenergy will have a 70 per-cent stake in Greenergy Brazil, to be headquartered in Sao Pau-

lo, and Bauche the remaining 30 percent. Greenergy has worked with suppliers in Brazil since 2007 to develop and implement environmental and social sus-tainability criteria. Bauche has extensive trading relationships with Brazilian mills. In 2010, traded volumes of Brazilian ethanol are expected to exceed 158 MMgy, according to Green-ergy. Of that, half will be sup-plied by Greenergy to the UK market.

William J. Brady joined cellulosic developer Mascoma Corp. as CEO in January, af-

ter 23 years with Cabot Corp., a chemical indus-try leader. Brady will also serve on the boards for Mascoma and Frontier Renew-able Resources LLC, the cellu-

losic ethanol plant under devel-opment in Kinsross, Mich. “Bill has extensive experience run-ning large commercial divisions for a major chemical company, which is exactly the skill set we need as Mascoma transitions into a commercial enterprise,” said Mascoma Chairman Bruce Jamerson. Acting president Jim Flatt will continue as executive vice president, research and de-

velopment/operations and Jam-erson will continue as chairman of Mascoma and Frontier.

John McCarthy has be-come CEO and president of Qteros Inc., Massachusetts-based developers of cellulosic ethanol. McCarthy joined Qte-ros from Microbia Inc. where he served as chief business offi cer of the developer of bio-based specialty chemicals for large-scale industrial applications. Pri-or to Microbia, McCarthy was executive vice president for Ve-renium Corp. where he helped with the successful merger and integration of Celunol and Diversa and the subsequent creation and execution of the industry’s precedent-setting strategic corporate partnership with BP plc. Venture capital-backed Qteros is working on a one-step microbial conversion process based on its patented and trademarked Q Microbe. Investors include, among oth-ers, Venrock Associates, Bat-tery Ventures, BP Ventures, Soros Fund Management LLC and Valero Energy Corp.

BinMaster Level Con-trols and Digi International have collaborated on the de-velopment of BinMaster’s Bin-Link Web-based bin, tank and

silo monitoring solution, which enables remote wireless inven-tory management. The system includes BinMaster SmartBob2 and SmartBob-TS1 sensors, which are mounted on the bins, and a Digi Connectport X gate-way, which runs the SmartBob application to provide bin level measurement data that can be accessed easily via the Internet.

Trace Environmental Systems marked 15 years in the business of providing emissions monitoring systems. The New Jersey-based company provides continuous emissions monitor-ing systems as well as predictive emissions monitoring systems that can lower the operational costs of stack monitoring. Its data acquisition software was groundbreaking when devel-oped, and remains the only user confi gurable product of its kind, according to the company. The company has provided moni-toring solutions for a number of biofuels facilities.

Joule Biotechnologies Inc. appointed Troy Campi-one senior vice president of corporate development. In this newly created role, he will lead

&Business PeopleEthanol Industry Briefs

Brady

ETHANOL PRODUCER MAGAZINE • April 2010 27

Sponsored by

Joule’s business development strategy and execution, includ-ing negotiating partnership and development agreements. Most recently, Campione worked with Solazyme, and prior to that at Symyx Technologies and Exxon-Mobil. Joule has a patent-pend-ing Helioculture technology us-ing engineered organisms and its SolarConverter system for direct production of advanced biofuels and chemicals.

Glycos Biotechnolo-gies Inc. appointed Daniel Monticello to direct labora-tory operations for the company as vice president, research and development. He also will be responsible for overseeing the company’s ongoing demonstra-tion and commercialization ef-forts in Latin America. With more than 20 years of work in industrial biotechnology, most recently Monticello cofounded Molecular LogiX Inc., an early-stage biotechnology company. GlycosBio has focused on the metabolic engineering of mi-crobes to consume multiple nonsugar-based, low value feed-stocks for the production of sustainable chemical intermedi-ates and advanced ethanol.

ZeaChem Inc. an-nounced it has successfully

scaled up its process technology to a 5,000-liter unit that achieved commercially acceptable acetic acid concentration levels on the fi rst fermentation run, while ex-ceeding ZeaChem’s time goals. The company is using acetogens, familiar organisms in wastewater treatment, to produce acetic acid from mixed sugars and hydro-lyzates derived from cellulosic biomass. Acetic acid is the fi rst step in a hybrid biochemical and thermochemical process for cre-ating cellulosic ethanol and bio based chemicals. The company received a $25 million U.S. DOE grant in December and plans to build a 250,000 gallon facility in Boardman, Ore., as the next step in commercialization.

ATEC Steel, an af-fi liate in the Tank Connection Affi liate Group, has acquired a 60,000-square-foot manufactur-ing plant in Baxter Spring, Kan. The addition will allow expansion of the company’s specialty steel construction and pressure vessel product lines, as well as its coat-ing applications. ATEC operates a second, 100,000-square-foot,

state-of-the-art facility in Baxter Spring and a 55,000-square-foot facility in Gardena, Calif. In a separate announcement, Tank Connection and Laidig Systems Inc. are creating an affi liate re-lationship to serve the industry with their complimentary prod-uct lines. Laidig is a global pro-vider of dry bulk silo storage reclaim systems.

Archer Daniels Mid-land Co. appointed Matthew Bruns to vice president, corn processing. Moving over from export trading in the grain group, Bruns will oversee ethanol trad-ing and sales as well as the corn business unit’s commodity risk. In its Dec. 31 quarterly fi nan-cial report, ADM reported a big increase in net earnings from its bioproducts division. Total ADM corn processing profi ts for the quarter were $290 mil-lion, with sweeteners and starch-es bringing in $171 million and bioproducts bringing in $119 million, compared to a $111 mil-lion loss in the second quarter of the 2008 fi scal year. ADM’s

quarterly report also noted the start up of its ethanol dry mill in Columbus, Neb., would add 300 MMgy in capacity; the com-pletion of cogeneration proj-ects will provide cost-effective process steam and electricity at plants in Clinton, Iowa, and Co-lumbus, Neb.; completion of the Brazilian joint venture sugarcane ethanol plant; completion of an expansion at its corn wet mill in Decatur, Ill.; and continuing construction on an ethanol dry mill in Cedar Rapids, Iowa.

Genencor, a division of Danisco A/S, received the Frost & Sullivan 2009 New Product Innovation Award for Bio-mass Enzymes. The award was granted for Genencor’s Acelle-rase product line, which indus-try analyst Frost & Sullivan said provides “signifi cant advantages that make it stand out from the competition.” EP

SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send infor-mation (including photos and logos if avail-able) to: Industry Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks ND 58203. You may also fax information to (701) 746-8385, or e-mail it to [email protected]. Please include your name and telephone number in all correspondence.


COMMODITIES REPORT

Natural Gas Report

Corn Report

By Brad Smith, U.S. Energy Services Inc.

By Jason Sagebiel, FCStone

Feb. 26—As several natural gas pipeline projects reached com-pletion over the past year, the physical delivery structure for natural gas, and consequently basis, has changed for much of the country. The completion of the Rockies Express Pipeline (REX) dominat-ed, allowing supplies previously destined for the Midwest to fl ow to higher-priced eastern markets. With each segment’s completion, prices have declined in the newly accessible regions. The net effect of the pipeline completion a year ago has been to decrease basis na-tionally, bringing traditionally higher-priced eastern regions down and strengthening the Midcontinent and Rockies. REX has “sold out” fi rm capacity and can deliver a formidable 1.8 billion cubic feet per day (bcf/d) from the Rockies to eastern Ohio—3 percent of U.S. supply. In response to the volumes and takeaways from REX into six pipelines, a new Platt’s Index pricing point for the Lebanon Hub has been developed. Depending on access to REX gas, much of the region has benefi ted by increasing and diversifying its supply base beyond Gulf of Mexico, Midcontinent, and local producers to include the Rockies.

So what about Ruby? With the intent to make Rockies gas

available to other regions, the proposed Ruby Pipeline project is similar to REX and would stretch 675 miles from the Opal hub in Wyoming to an interconnection at Malin, Ore. With a 42-inch transmission pipe and a design capacity of 1.5 bcf/d, Ruby could infl uence the basis in the Rockies and the West coast. At the mo-ment, the project is under Federal Energy Regulatory Commission review. Should it obtain approval early this year, the project would move to the construction stage with an in-service date of March 2011. The obvious regional effect would be to raise basis costs in the Rockies, Canada, and the Midcontinent while lowering costs in the Northwest. During peak demand periods, the pipeline would allow the Northwest to source Rockies gas as a competitive alterna-tive to Canadian supply. This year may create an incentive for the $3 billion project as the Northwest will primarily source gas from a pool of declining Canadian exports, while suffering from fi ve-year-low water levels that the EIA predicts will lower hydro power generation by 8 percent. EP

Brad Smith, price risk manager, can be contacted at [email protected].

Feb. 19—The corn market has been range bound since Janu-ary’s surprise report. The only market-moving ideas are the increas-ing Argentine corn crop and U.S. and global wheat stocks. Plentiful global wheat supplies could limit upside movement of corn for feed regardless how the dollar trades. World wheat ending stocks are 195.86 million metric tons, versus 164 a year ago.

In the February report, the USDA reduced estimated corn carry-out. Despite the record U.S. corn crop, the carry-out to use ratio rests at just 13.1 percent. As corn demand grows each year it is imperative that production stays in pace. The USDA increased corn for ethanol by 623 million bushels from last year to 4.30 bil-lion bushels this marketing year while lowering corn for exports and other industrial uses by 50 and 11 million bushels respectively. Feed demand remained unchanged from the previous month, al-though projections increased from 5.25 to 5.55 billion bushels year on year.

The U.S. corn market awaited the resurvey of producers issued in March that could impact yield and/or acres harvested. In addi-tion, the fi rst look at U.S. planted acres was to be released in late March. Potential planting delays from snow cover, excess moisture, and unharvested crops weigh upon traders’ minds. Another con-cern will be corn quality as temperatures warm.

The chart shows ethanol use and the average USDA farm price per bushel for corn. This year is the fi rst since 2006-’07 where corn prices are below the trend despite increasing demand. EP

REX pipeline changes basis, pricing nation-wide

Corn market trading on big crop, tight carry-out to use ratio


COMMODITIES REPORT

DDGS Report

Ethanol Report

By Sean Broderick, CHS Inc.

By Rick Kment, DTN Biofuels Analyst

Tight rail backlogs shipments, saturates local markets

Economic challenges threaten ethanol support

Feb. 19—Domestic DDGS pric-es weakened in February, with export markets staying fi rm. Container mar-kets were still very strong, especially in Chicago and the West Coast, with much of the increase attributed to China. New transload areas popped up in places like Fargo, N.D., St. Paul, Minn., Savannah, Ga. and Chesapeake, Va. Product movement is expected to continue increasing to the Pacifi c Rim, and container logistics and product quality will continue to be hot topics.

With this year’s weather, rail-roads have struggled to move product, though they are expected to eventu-ally catch up on DDGS shipments. Given the tight car situation, increas-ing amounts are forced into local truck markets. As a result, we are seeing

more wetcake than normal, saturating nearby markets. Sellers are fearful how it will play out this summer, when de-mand traditionally weakens.

In exports, to date, China has not offi cially approved DDGS imports creating uncertainty that may lead to reluctant U.S. exporters and could shorten the duration of the contracts that do get written, as traders try to minimize risk. Currently, bulk shipping rates to Asia favor West Coast over the Gulf by almost $15 per metric ton, so those that ship to the river will have a problem matching the carry in the corn market. With the South Ameri-can harvest approaching and spring planting approaching in the U.S., it will not be a boring summer for market watchers. EP

Feb. 19—Ethanol prices contin-ued to erode through mid-February as corn futures moved signifi cantly lower due to lack of investment trader inter-est. In addition, energy markets suf-fered from a lack of upward movement in the economy. The Dow Jones In-dustrial Average dropped below 10,000 for the fi rst time this year, and news of other debt and solvency issues of global countries remained in the front of most traders’ minds. Prices of gasoline fell nearly 20 cents per gallon in the month, but the outlook on the economy did not use the price decline to increase demand. The long, cold winter season that was relentless in most of the coun-try limited travel for many consumers. The outlook for gasoline demand re-

mained strong heading into summer with RBOB gasoline futures posting signifi cant premiums in deferred con-tract months. This meant traders were willing to put off buying activity until later when they expect demand to be better, instead of making purchases in the front month March contract.

Ethanol contracts remained cau-tious at best with traders following the weakness in the corn market, as well as lower gasoline prices. The expectation of higher demand for gasoline through the late spring and summer months helped uphold ethanol demand expec-tations, but in mid-February there was ample product available for usage and demand was sluggish through most re-gions of the country. EP

Regional Ethanol Prices ($/gallon as of Feb. 19) - Front Month Futures Price (AC) $1.70

Regional Gasoline Prices ($/gallon as of Feb. 19) - Front Month Futures Price (RBOB) $1.9295

DDGS Prices ($/ton)

Corn Futures Prices (May. corn, $/bushel)

Natural Gas Prices ($/MMBtu)

U.S. Ethanol Production Output (barrels/day)

Cash Sorghum Prices ($/bushel)

REGION

West Coast

Midwest

East Coast

REGION

West Coast

Midwest

East Coast

LOCATIONMinnesota

Chicago

Buffalo, N.Y.

Central Calif.

Central Florida

DATEFeb. 12, 2010

Jan. 12, 2010

Feb. 12, 2009

NYMEX

N. Ventura

Calif. Border

November 2009

October 2009

November 2008

Superior, Neb.Beatrice, Neb.Sublette, Kan.Salina, Kan.Triangle, TexasGulf, Texas

SPOT

1.84

1.75

1.835

SPOT

1.9503

1.8265

1.9161

APRIL 201095

122

125

159

146

HIGH3.75 3/4

4.29 1/4

3.86

MARCH 20104.816

5.000

4.860

786,000

741,000

686,000

FEB. 13, 20103.123.022.803.263.113.91

RACK

2.12

2.05

2.02

RACK

2.035

1.9035

2.0138

MARCH 2009105

133

135

171

152

LOW3.69

4.03

3.76

FEB. 20105.274

5.860

5.660

JAN. 15, 20093.173.092.843.213.123.96

APRIL 2009130

140

145

173

168

CLOSE3.373 1/4

4.03

3.76

MARCH 20094.056

3.960

3.230

FEB. 12, 20092.862.792.813.022.743.69

SOURCE: DTN

SOURCE: DTN

SOURCE: CHS Inc.

SOURCE: FCStone

SOURCE: Sorghum Synergies

SOURCE: U.S. Energy Services Inc.

SOURCE: U.S. Energy Information Administration


SunOpta BioProcess Inc. will supply a major ethanol pro-ducer in China with equipment for cellulosic ethanol produc-tion. The plant intends to install the equipment in a demonstra-tion facility scheduled for com-

pletion late this year. SunOpta has also been awarded $5.5 mil-lion in funding from Sustainable Development Technology Can-ada to aid in the design and con-struction of a cellulosic facility in the Greater Toronto area.

Petrobras Brazil is generat-ing electricity using ethanol in Juiz de Fora, Brazil. The 43.5 megawatt GE turbine, which was converted from natural gas for fl ex fuel use, began operat-ing Dec. 31. Emission testing from Dec. 31 to Jan. 13 showed nitrogen oxide emissions were reduced 30 percent from natu-ral gas. The turbine is located in a power generating park with 14 thermoelectric plants running on natural gas, 12 on oil and 15 small hydroelectric plants.

Flex-fuel turbine generates power in Brazil

BIObytes Ethanol News Briefs

The governors of Ohio and Wiscon-sin praised biofuels in their State of the State addresses, both on Jan. 26. Ohio’s Gov. Ted Strickland lauded the fact that the state had gone from zero eth-anol production in 2007 to 295 MMgy produced at four plants

in the state. Wiscon-sin’s Gov. Jim Doyle talked about the rapid expansion in renew-able energy produc-tion, specifi cally etha-nol plants. He asked legislators to quickly

pass the state’s Clean Energy Jobs act to create new jobs.

Governors back biofuels

SunOpta lands China deal, receives Canadian funding

Brazil President Luiz Inacio Lula da Silva, center, inaugurated the ethanol-run turbine Jan. 19. Dilma Rousseff, far left, is chief of staff, and Edison Lobao, second from right, is minister of mines and energy.

Strickland

PHO

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Three Ohio ethanol pro-ducers have formed the Ohio Ethanol Producers Association to promote the industry. “We wanted to make sure that our agenda and our contributions were being considered by the legislature,” said Mark Borer, general manager of Poet Biore-fi nery in Leipsic, a 60 MMgy ethanol plant. Also members of the group are Poet plants in Fos-toria and Marian, 50 MMgy and 68 MMgy facilities, respectively.

The group will take on the role that Buckeye Renew-able Fuels Association had in the past, Borer said. That asso-ciation disbanded last year amid market pressures.

Ohio’s fourth operating ethanol plant is The Andersons Marathon Ethanol LLC, a 110 MMgy facility located in Green-ville. The Valero-Bloomberg ethanol plant, a 110 MMgy facil-ity near Bloomberg, is expected to restart later this year. Two others, AltraBiofuels Coshocton Ethanol LLC, in Coshocton, and Greater Ohio Ethanol LLC, Lima, are also in the process of restarting.

The ethanol industry has signifi cantly impacted Ohio’s economy in recent years, espe-cially the rural economy, Borer said. The industry has invested nearly a billion dollars and cre-ated many jobs.

Ohio producers form new association


Novozymes North American vice president Adam Monroe points to a bundle of shredded paper similar to those used to make “trashahol.”

A landfi ll gas project that transports methane gas from a Sioux Falls, S.D. landfi ll through an 11-mile pipeline to a Poet LLC ethanol plant in Chancel-lor, S.D., was awarded by the U.S. EPA. Poet pays the city for the methane, believing that when combined with waste wood, the ethanol plant could be powered entirely from renewable energy. James Moe, Poet chief operating

offi cer, said the award signifi es the importance of renewable energy. “We want to use renew-able energy to power our pro-duction processes as well.” Poet also recently announced it has implemented a water recycling system in its Preston, Minn., plant that will reduce water use 13 percent and help recycle 19 million more gallons of water per year.

Poet landfi ll gas project wins award

Eleven CEOs of the na-tion’s leading cellulosic ethanol companies sent a letter to U.S. DOE Secretary Steven Chu and members of the Senate Energy Committee prior to a Feb. 11 committee hearing acknowledg-ing the support for cellulosic ethanol development through the renewable fuels standard and grant funding, but expressing concern that biofuel developers might have diffi culty using the loan guarantee program.

Specifi cally, the program requires a long-term, fi xed-price offtake agreement as a determin-ing factor in evaluating whether a project has a reasonable pros-pect of repayment as required in the law establishing the loan guarantee. “This approach,” the letter states, “drives a systematic bias toward lending for power generation projects that can ob-tain state-sanctioned, long-term

power purchase agreements due to the regulated structure of the electric power industry. By contrast, the liquid fuels mar-ketplace does not operate within such a framework; long-term, fi xed-price forward contracting mechanisms, offering assurance of predictable future revenue streams, simply do not exist in our target markets.”

Signatories included the CEOs of Abengoa Bioenergy, BlueFire Ethanol, Coskata, Enerkem, Frontier Renewable Resources, Ineos Bio, Iogen, KL Energy, Mascoma, Range Fuels and Verenium. Notably, Aben-goa announced in January that it had teamed up with Mid-Kansas Electric Co. LLC to develop a cellulosic ethanol and power plant in Stevens County, Kan., to produce 15 MMgy of ethanol and 75 megawatts of power per year.

Novozymes Inc. and Fi-beright LLC produced an ad-vanced biofuel from govern-ment waste paper for the 2010 Washington Auto Show held in January as part of a “Ride ’n Drive” event allowing gov-ernment offi cials to test drive vehicles using the “trashanol.” The advanced biofuel com-

bined Novozymes CTec and HTec enzymes with Fiberight’s process. In other news, No-vozymes received an Advanced Energy Manufacturing Tax Credit of $28.4 million from the Obama administration in January towards the construc-tion of its new enzyme facility in Blair, Neb.

Fiberight, Novozymes partner on ‘trashanol’

CEOs request change in DOE loan guarantee The International Organi-

zation for Standardization an-nounced the formation of a new committee, Sustainability for Bioenergy, to formulate its inter-national sustainability standard. ISO aims to use international expertise during discussions dealing with social, economic and environmental aspects of production and use of bioener-gy. With 29 countries already in-volved as participants or observ-

ers, the project on bioenergy may take three years or until the end of 2012. Brazil and Germany will provide both secretariat and leadership duties for the project. The U.S. and China will serve as observers. According to Maria Lazarte, communication offi cer for ISO, the U.S. will, “follow the process” but will not participate in the vote. The ISO hopes the standard makes bioenergy more competitive.

ISO tackles sustainability standard


Corn ethanol dodged a bullet when the fi nal rule to imple-ment the revised renewable fuels standard was released Feb. 3. Under the proposed rule, no corn ethanol made the greenhouse gas (GHG) reduction target in the U.S. EPA modeling used to evaluate different fuel pathways. While plants were grandfathered in that were in production or had begun construction at the time the Energy Independence and Security Act became law in Dec. 19, 2007, the poor performance of corn ethanol in the proposed rule’s GHG calculations would have been devastating for plants that began construction after that date.

“We listened to public comment and worked closely with the USDA,” said EPA Administrator Lisa Jackson at the news confer-ence announcing the release of the rule. She noted there were three major areas that changed the GHG ratings for corn ethanol. “On crop productivity, the data we used was not right,” she said. The EPA also changed the way it considered coproducts, and the indirect land use modeling was broadened beyond the initial 40 nations to include 160 nations, which changed the numbers, she said. Jackson admitted the low GHG scores for corn ethanol and soy-based biodiesel constricted market investment, and said the fi nal rule should give investors renewed confi dence in biofuels. “Based on what we know now, including indirect land use change (ILUC), there is no basis to exclude these fuels.”

In releasing the fi nal rule, the EPA said it had made multiple modifi cations to the models used and quantifi ed the uncertainty associated with many components. “EPA is confi dent that its modeling of GHG emissions associated with international land use is comprehensive and provides a reasonable and scientifi cally robust basis for making threshold determinations,” the back-ground statement to the life-cycle analyses portion of the fi nal rule says.

The EPA determined:Ethanol produced from corn starch at a new natural gas,

biomass, or biogas-fi red facility using advanced effi cient technolo-gies will meet the 20 percent GHG emission reduction threshold compared to the 2005 gasoline baseline

Biobutanol from corn starch also meets the 20 percent threshold

Ethanol from sugarcane complies with the applicable 50 percent reduction threshold for advanced biofuels

For cellulosic ethanol and cellulosic diesel, the pathways modeled by EPA for feedstock and production technology would comply with the 60 percent GHG reduction threshold for cel-lulosic biofuel

Similarly, biodiesel from soy oil also will meet the 50 per-cent GHG threshold.

In addition to the feedstocks and fuel pathways that were modeled in the development of the rule, the EPA mentions fi ve categories of feedstock that are expected to have less or no ILUCs including:

Crop residues such as corn stover, wheat straw, rice straw, citrus residues

Forest material including eligible forest thinning and solid residue remaining from forest product production

Secondary annual crops planted on existing crop land such as winter cover crops

Separated food and yard waste including biogenic waste from food

Perennial grasses including switchgrass and miscanthusOther feedstocks were not yet suffi ciently modeled, EPA said,

but will be included in a rulemaking later this summer. Among the crops named were grain sorghum ethanol, woody pulp ethanol and palm oil biodiesel. EPA is also establishing a process where by biofuel producers or importers can petition the agency to con-sider a new fuel pathway for eligibility. “EPA will use the data sup-plied in the petition to evaluate whether the information for the fuel pathway, combined with information developed in this rule-making for other fuel pathways, is suffi cient to allow EPA to de-termine whether the new fuel pathway qualifi es,” the background to the rule says.

While the industry was pleased that corn ethanol (and soy biodiesel) would meet GHG reduction targets, it was not happy that international indirect land use impacts were still part of the GHG analysis. “While we appreciate that EPA recognizes the un-certainty of ILUC, the fact remains that ILUC is still in the rule,” said Tom Buis, CEO of Growth Energy. “This puts the cart be-

Final RFS rule qualifi es all corn ethanol, launches new online RINs system


fore the horse, and our position is that ILUC should not be ap-plied in regulation until we have a thorough, long-term study of the issue.” The Renewable Fuel Association also reported disap-pointment over “oft-challenged and unproven theories on ILUC.” However, the RFA called the fi nal rule a workable program that showed GHG benefi ts of ethanol compared to gasoline. “At the end of the day, the RFS is public policy that can and will work effectively,” the RFA said. The American Coalition for Ethanol also said it was pleased that the fi nal rule refl ected the fact that corn ethanol has an advantage over gasoline. Still, ACE said, the regulations seriously underestimate ethanol. “We don’t believe the agency’s overall assessment of ethanol’s GHG reduction potential was good enough or accurate,” said Brian Jennings, executive vice president of ACE. ILUC is a theory based on computer model-ing, not real-life data and if removed from the RFS, corn ethanol

would represent a 61 percent reduction in GHG emissions, ACE said.

On the same day the RFS fi nal rule was released, the heads of the USDA, U.S. EPA and U.S. DOE demonstrated the administra-tion’s support for biofuels in the fi rst report from the Biofuels In-teragency Working Group, created in May. “First-generation corn grain ethanol is a critically important renewable fuel source that is lowering our reliance on foreign petroleum dependent fuels, and cellulosic ethanol will soon be contributing as well. Advanced next generation biofuels will be one of the nation’s most important industries in the 21st century,” the report says. The interagency working group calls for greater coordination of efforts across the agencies and “strong management for results using a regional sup-ply chain systems approach that ensures all fuels produced are compatible with the U.S. transportation fuel infrastructure.”

Two weeks after the fi nal rule was released, conference go-ers at the National Ethanol Conference packed an early morning session Feb. 17 to learn more details. EPA representatives laid out the new EPA Moderated Transaction System, a Web-based reporting system that will be used to generate, sell, buy, separate or retire renewable identifi cation numbers (RINs). The new plat-form expands the existing RINs system used for conventional corn ethanol to also track advanced biofuels, cellulosic ethanol and biomass-based diesel. Those producers already using RINs 1 were encouraged to register immediately and begin testing EMTS. RINs 1 will continue to be traded until July 1 when the RFS2 takes effect. All parties will have to register anew, since there is no mechanism to import those already using RINs 1. Producers must register 60 days prior to beginning production, or by July 1. Etha-nol plants grandfathered into the act must register their permitted capacity to determine the gallons of qualifying fuel production. Any expanded capacity will be required to meet the 20 percent GHG reduction threshold.

The fi nal rule and supporting background and documents can be found on the EPA Web site at www.epa.gov/OMS/renewablefuels/#regulations.

—Holly Jessen, Luke Geiver and Susanne Retka Schill

Each year, the EPA will determine the amount of biofuels required to meet the renewable fuel stan-dard for the following year. For 2010, the volume of cellulosic ethanol in the standard was reduced drastically to just 6.5 million ethanol-equivalent gallons. The new system for renewable identifi ca-tion numbers will distinguish the four types of re-newable fuels. With RFS2 rules becoming effective July 1, the fi rst year will be a mix of RINs1 and RINs 2.

The 2010 standards shown below represent the fraction of a refi ner’s or importer’s gasoline and diesel volume, which must be renewable fuel.

percentCellulosic biofuel 0.004Biomass-based diesel 1.10Advanced biofuel 0.61Renewable fuel 8.25


Bob Dinneen, president and CEO of the Renewable Fuels Association, painted a picture of an industry rebounding from recession in his remarks to the 1,300 people who attended the National Ethanol Confer-ence held Feb. 15-16 in Florida. “Over the past decade—and especially over the past year—we have taken everything that the economy and all our adversaries could throw at us,” he said, “and we’re still standing—strong, united, and focused on the future.” Despite a diffi cult economy, the ethanol in-dustry grew by 15 percent last year and saw 14 plants reopened, eight plants started and capacity increased by 1.5 billion gallons, he reported. The industry continued to pro-vide jobs, reduce greenhouse gas emissions and reduce oil imports. Still, Dinneen’s op-timism was tempered by the challenges fac-ing the industry. “We must break through the blend wall, we must address questions

about ethanol’s carbon footprint, and, most importantly, this year we have to extend the tax incentive and the offsetting secondary tariff for ethanol fuels,” he said.

With the NEC being held just only two weeks after the renewable fuels standard (RFS2) fi nal rule was released, speakers ad-dressed its impact in several presentations. Indirect land use change (ILUC) modeling used in the fi nal rule did improve the out-look for biofuels, although many were very disappointed it was included at all. RFS2 was “fundamentally fl awed by the slav-ish devotion to the ill-conceived notion” of ILUC, Dinneen said. Conference-goers also learned more about the U.S. EPA’s new system, the Web-based EPA Moderated Transaction System, which is expected to be easier to use and reduce errors in tracking renewable identifi cation numbers needed for RFS2 compliance.

In another presentation, six compa-nies reported progress towards commer-cial-scale cellulosic ethanol production fa-cilities in a panel moderated by U.S. DOE spokesperson Valri Lightner, who restated the agency’s support, specifi cally pointing to the loan guarantee program the depart-ment plans to use to support mainly cel-lulosic ethanol projects. “Those efforts are moving a little more slowly than we fi rst anticipated,” she admitted.

A brief synopsis of the six reports given illustrated the pace of project devel-opment:

Range Fuels Inc., Soperton, Ga., construction completion February 2010

Verenium Corp., Highlands County, Fla., break ground 2010, production 2012, second site in development

Abengoa Bioenergy, Hugoton, Kan., break ground 2010, production 2012

‘Climate of Opportunity’ evident at NEC

RFA president and CEO Bob Dinneen, left, and Nathanael Greene, far right, of the Natural Resources Defense Council exchange comments during the Washington Insiders panel held at this year’s National Ethanol Conference. Others on the panel included, left to right, Jon Doggett, National Corn Growers, John Eichberger, National Association of Convenience Stores, Shane Karr, Alliance of Automobile Manufactures, and Marty Durbin, American Petroleum Institute.


Mascoma Corp., Kinross, Mich., currently in design engineering and per-mitting

Coskota Inc., southwest U.S., work-ing on fi nancing

Iogen Corp., sites selected, next step fi nancing

Speaking on oil investment in etha-nol, Tom McKinlay, senior vice president of manufacturing for Murphy Oil USA, gave a thought- and laughter-provoking presentation. Before coming to the NEC, he said, he didn’t realize foreign oil was more feared than the EPA. “We don’t fear foreign oil,” he added. “Foreign oil is not bad. … Canada looks fairly cuddly from where I stand.” Murphy Oil believes the ethanol industry will, after a period of vol-atility, grow dramatically. Last fall the com-pany purchased one of the bankrupt Vera-

Sun facilities, a 110 MMgy ethanol plant in Hankinson, N.D. “Ethanol is cheap gaso-line, that’s why we’re in ethanol,” he said, adding that the company is proud to be in the business. Still, McKinlay fi rmly stated that the answer is not ethanol—it’s actually foreign oil, which will continue to make up the bulk of fuel in the United States.

Several speakers addressed the blend wall. Cliff Cook, senior vice president of supply, distribution and planning for Marathon Petroleum Company LLC, said he didn’t believe the public wanted or was ready for E85 or blender pumps. Later, Karl Doenges, executive director of Pro-tec Fuel Management, said E85 is critical for going beyond the blend wall, and said it’s a misconception that E85 is a lower value product. It might have to be priced lower but that doesn’t mean the bottom

line will be lower, as market forces such as rising oil prices and RFS2 will establish de-mand. “The room for growth is phenom-enal and that will continue to accelerate,” he said. With the Big Three automakers pledging to make half their vehicles fl ex fuel by 2012, there’s a big need for more E85 infrastructure particularly in states such as California and Florida, where the majority of fl ex-fuel vehicles (FFV) are located, but few E85 stations exist. In some areas, Doenges said, there are 800 FFVs to one E85 station. Thirty-six billion gallons of biofuels can’t be met by E10, E15 or likely not even blending, Dinneen said in his address. “We must also prime the pump for continued market develop-ment in higher ethanol blends and E85 by dramatically expanding the availability of blender pumps.”

General Motor’s Tom Stephens also talked about infrastructure needs. The vice chairman of global product operations for GM said the company strongly supports blender pumps. Today, 66 percent of E85 fueling stations are located in the Midwest, where only 19 percent of FFVs are, he said. GM doesn’t believe there is one silver bullet and is interested in other alternative fuels, electric vehicles and hydrogen al-though it does believe liquid fuels, includ-ing ethanol, are the most cost-effective, near-term solution. “The promise of bio-fuels is real and it’s all our job to get the job done,” he said.

Another notable moment at the con-ference was when Ron and Diane Fagen received RFA’s fi rst-ever membership award, recognizing their contribution to the industry for their leadership in plant construction.

—Story and photos by Holly Jessen

Bob Dinneen, president and CEO of RFA, gives his state of the industry address at the National Ethanol Conference, held Feb. 15 to 17 in Orlando, Fla.


Several plants bought, resume production From California to Pennsylvania and many states in between,

ethanol plants continue to come online, be recommissioned and new projects move forward.

In ProductionProduction resumed at Pacifi c Ethanol Inc.’s 60 MMgy Magic

Valley plant in Burley, Idaho, in early January. The plant had been idle since February 2009. Due to unfavorable market conditions, the company’s subsidiaries fi led voluntary petitions under Chap-ter 11 of the U.S. Bankruptcy Code in a restructuring effort for the Idaho facility and its other plants in Stockton and Madera, Calif., and Boardman, Ore. In mid-March, the plant in Burley was the only one back in production. “The plant is running good and they are moving rapidly to work out the kinks to get back to full capacity,” said Paul Koehler, vice president of Pacifi c Ethanol.

The fi rst commercial-scale plant in Pennsylvania started pro-ducing ethanol at the end of 2009. Bionol Clearfi eld LLC, a 110 MMgy plant in Clearfi eld, Pa., was performance testing in early February. Although not in the Corn Belt, it is located in what the company considers a gateway to New York blending terminals. “We are just starting to break into that marketplace,” said Roger Schmidt, general manager. The new plant has a corn supply agree-ment with Lansing Trade Group, headquartered in Overland Park, Kan., although currently, up to 75 percent of its corn is sourced from Pennsylvania and eastern Ohio, Schmidt said.

In another fi rst, construction was completed on the fi rst corn-based ethanol plant in North Carolina. In early February,

Clean Burn Fuels LLC’s 60 MMgy facility began commissioning with the fi rst grind anticipated for early April, according to Doug Archer, general manager. Although plant completion has taken longer than fi rst expected, Archer said the delayed opening may be advantageous. “The market has started to turn,” Archer said. “Instead of a volatile market, we are looking at a pretty fl at, even market, and the industry is doing really well right now.”

The retrofi t project at Tharaldson Ethanol plant in Cassel-ton, N.D., was nearly complete in February. ICM Inc. started work building a new energy plant at the recently completed 110 MMgy plant in November. ICM has been contracted to manage the plant and employs about 50 people at the location.

Resuming ProductionBuilt in the 1980s, this legacy ethanol plant, formerly known

as Sun Energy, was purchased by Nexsun Corp., which plans to double capacity to 6 MMgy. The company expected to start up-grades in late February or early March and reopen the modern-ized plant by early summer, according to Alex Park, vice president of project development with Nexsun. “When I say modernize, we want it to run as effi ciently as possible to produce as much ethanol as possible per bushel of feedstock,” he said. “We have to automate the plant, to put in processes that monitor it constantly with computers, instead of people turning knobs.”

The purchase of Renew Energy, a 110 MMgy plant in Jef-ferson, Wis., was fi nalized by Valero Renewable Fuels Co. LLC, which bid on the facility in a December bankruptcy auction. Al-

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though William Blair & Co. and Bankers’ Bank, the lead secured creditor named Valero as the winning bidder after the auction, Iowa-based All Fuels & Energy unsuccessfully disputed that in court. The company then tried offering Valero $100 million for the plant, which was not accepted. “We took their calls as a cour-tesy,” said Bill Day of Valero’s corporate communications depart-ment, “but the transaction closed and Valero now offi cially owns the plant. We intend to operate it.”

AE Biofuels entered into a three-year agreement with Cil-ion Inc., the owner of a California ethanol plant that has been idle since April. The 55 MMgy plant in Keyes, Calif., will operate under the name AE Advanced Fuels Keyes and is expected to restart production in late spring. Initially the plant will continue to use corn as its main feedstock with plans to utilize up to 25 percent agricultural residues. “Our goal for cellulosic production is the fi rst half of 2011,” said Andy Foster, president and chief operating offi cer.

An 85 MMgy ethanol plant owned by Sunco Inc. in Fulton, N.Y., will be retrofi tted by ICM Inc. Sunoco, a leading manufac-turer and marketer of petroleum and petrochemical products, purchased the idled facility in mid-2009. According to ICM, the Sunoco plant will begin receiving corn and resume operations in July. Speaking on the project, Michael McKee, general manager of Sunoco’s ethanol business, said, “ICM has the knowledge and experience to make this project a success. We are pleased to join with ICM to complete this important work and begin operating the facility.”

Cellulosic Ethanol Advances A grand opening for a cellulosic ethanol demonstration fa-

cility in Vonore, Tenn., was held Jan. 29. The DuPont Danisco Cellulosic Ethanol LLC and University of Tennessee/Genera En-ergy LLC project began producing ethanol in mid-January. The 74,000-square-foot facility has the capacity to produce 250,000 gallons of ethanol from corncobs and switchgrass and is prepar-ing DDCE’s integrated technology for commercial production by 2012.

Joule Biotechnologies Inc. leased land in Leander, Texas, for a cellulosic ethanol pilot plant that is expected to be operation-al later this year. The Cambridge, Mass.-based company will be scaling up its trademarked Helioculture technology to produce ethanol from microorganisms. Currently, tests show the process yields ethanol in excess of 6,000 gallons per acre, per year. “We’re taking it one step further with a pilot plant,” said Felicia Spagnoli, company spokesperson, adding that the goal at the pilot plant will be to optimize the system and drive up productivity rates. The company estimates full-scale, commercial production utilizing their microbial-based process will yield 25,000 gallons per acre, per year of ethanol.

—Holly Jessen

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Pipeline, terminal, E85 plans move forward

As ethanol distribution demands increase, infrastructure planning continues to expand.

Magellan Midstream Partners LP has joined with ethanol giant Poet LLC to assess the feasibility of a 1,800-mile ethanol pipeline. Starting in Davison County, S.D., the proposed pipeline would connect ethanol production facilities in the Midwest to distribution outlets in the northeast U.S., ending in Linden, N.J. Based on a report done by consulting fi rm LECG Inc., the capacity of the pipeline would equal 240,000 barrels of ethanol a day, an amount of more than 3.5 billion gallons annually.

For both parties, the proposed pipeline is not only the next step for ethanol distribution effi ciency, but a necessary component for the future of the ethanol industry. “Pipelines are the most cost effi cient, safest and most reliable mode of transportation for liquid energy,” Mike Mears, chief operating offi cer of Magellan said. “Construction of a large-scale renewable fuel pipeline complements the national ob-jective of creating quality jobs while increasing transportation effi cien-cies for the growing renewable fuels industry.”

The Biofuels Interagency Working Group, with members from the USDA, DOE and the U.S. EPA recently released an agenda out-lining a way to achieve President Barack Obama’s biofuels target. Job creation, a contributing factor of Obama’s biofuels target, is something Poet CEO Jeff Broin believes will happen with the construction and

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KMP continued expansion of its Tampa ethanol facility, adding a 100,000 bar-rel tank.

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use of the proposed pipeline. “This project has the clear environmen-tal benefi t of dramatically reducing carbon emissions from traditional ethanol transportation, and this latest report shows its important im-pact on our economy. Ethanol continues to play a large role in the new energy economy taking shape in the U.S.”

According to the report, 80,000 jobs would be created during the construction of the pipeline with 1,100 permanent jobs available for pipeline operation. Even with the promise of new jobs and environ-mental benefi ts, the pipeline feasibility depends on a DOE loan. “The status of our study resides in Washington,” Bruce Heine of Magellan said. “We are working with Congress to modify the loan guarantee pro-gram with the DOE.”

The DOE loan program was not equipped to handle an 1,800-mile pipeline according to Heine. Until the loan status from the DOE gets resolved, the pipeline will have to wait, but the expansion of blend-ing terminals and pumps by other infrastructure players will move for-ward. Kinder Morgan Energy Partners LP recently partnered with U.S. Development Group, an ethanol blending and handling company. As part of the joint agreement, KMP acquired three USD train ethanol terminals in Linden, N.J., Baltimore, Md., and Dallas, Texas, for a total of approximately $195 million. The terminal acquisition will create a nationwide distribution network of ethanol handling facilities con-nected by rail, marine, truck and pipeline, according to KMP.

The train terminal acquisitions bring KMP investments in the re-newable fuels handling business close to $500 million. Although the joint venture agreement is not currently developing a pipeline, Dan Borgen, president and CEO of USD noted the changes the partner-ship will bring to ethanol movement. “We look forward to partnering

with Kinder Morgan, a national leader in fuel transportation and stor-age, to revolutionize the way that biofuels are delivered to the market. The venture will offer immediate, signifi cant effi ciencies for our cus-tomers.”

KMP believes the formation will also help customers on all three coasts. Along with USD partnership, KMP has added ethanol handling capacity at its Orlando, Fla., terminal with the addition of a 100,000 barrel storage tank. KMP is currently building new unit rail car ethanol loading facilities, in Richmond, Calif., and Houston, Texas.

The push for infrastructure expansion doesn’t just stop with the transportation sector. The DOE has awarded Growth Energy a $200,000 grant for the expansion of E85 blending stations in the states of Virginia and Washington. The award, one of eight given to support existing retail ethanol fuel locations, will also be given to the states of Arkansas, California, Florida, Georgia, Michigan, Missouri and Texas. The stations will be selected according to proximity to key highway corridors and areas with higher concentrations of fl exible fuel vehicles. The general plan for each state is to retrofi t existing pumps for E85 use or install new pumps. “By increasing the use of ethanol in America,” Tom Buis, CEO of Growth Energy said, “we will create new green -collar jobs, reduce our dependence on foreign oil, strengthen our na-tional security and improve the environment.”

The DOE’s funding for blender pumps indicates the ongoing in-frastructure build-out, but Growth Energy, like KMP and Poet, is still awaiting information regarding funding details.

—Luke Geiver

39

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Canadian government orders biofuels studyCanada is looking into the environmen-

tal impact of biofuels. Environment Canada solicited companies to complete an assess-ment of the ecological footprint of biofuel production facilities in Canada. The contract is for $65,000 and completion is expected this spring.

“The commissioning of this study does not presuppose that there are any harmful effects from these facilities,” a spokesperson for Environment Canada told EPM, “nor does it change the government of Canada’s commitment to renewable fuels.” According to the request for proposals, Canada’s emis-sion modeling anticipates signifi cant green-house gas (GHG) emission reductions from renewable fuels.

The Canadian government is following through with its commitment to establish regulations for renewable fuels in the fuel supply. Those regulations are expected to

be published early this year, as part of the government’s broader renewable fuels strat-egy to reduce GHG emissions. “The strat-egy requires 5 percent renewable content of gasoline by 2010,” the spokesperson said. “Canada also intends to implement a re-quirement for 2 percent renewable content in diesel fuel and heating oil by 2011, or ear-lier, subject to technical feasibility.”

Still, Environment Canada’s scientists need more information and, most impor-tantly, they need it from a Canadian context. The study will help them understand the environmental performance of biofuels, the document said. That performance is expect-ed to vary, depending on the type of feed-stock used, processes, scale of operations, location of the facilities and coproduct use. “Liquid biofuels were initially viewed as an overall environmentally benefi cial alterna-tive to traditional hydrocarbon-based liquid

fuels,” the document said. “However, recent studies in the United States suggest that this might not always be the case.”

The goal of the study is to provide information on the environmental implica-tions of biofuel production in Canada in a more comprehensive and detailed way. The report will:

List all biofuel plants operating in Canada

Provide real data from at least 10 ethanol and biodiesel facilities

Summarize the data, identifying trends and possible benchmark targets

Not long after Environment Canada called for companies to submit proposals for the study, the Canadian government passed out funding to 16 clean technology compa-nies. Sustainable Development Technology Canada announced $58 million in funding, $13 million of which was earmarked for


proposed cellulosic ethanol plant projects. The 16 projects awarded funding repre-

sent many of the country’s main economic sectors, from energy and transportation to waste management. “Our government con-

tinues to help bring innovative renewable energy technologies from idea to market-place,” said Lisa Raitt, minister of natural resources. “Investing in these projects will stimulate the growth of a domestic clean

energy industry, create high-quality jobs for Canadians and help protect our environ-ment.”

Awarded up to $7.5 million was a 12 MMly (3.17 MMgy) pilot plant proposed by Ferme Olivier Lépine Inc., a St. Alexis, Que-bec, company. The consortium, according to the SDTC, has developed a “unique integra-tion of processes from other industries to produce ethanol and important coproducts from otherwise unused agricultural waste materials.”

The second project was a 2 MMly cellu-losic ethanol pilot plant proposed by SunOp-ta BioProcess Inc., Brampton, Ontario, that was awarded up to $5.5 million. The com-pany has developed a process to produce ethanol from wood chips. A byproduct of the process is food-grade xylitol.

—Holly Jessen

Husky Energy in Lloydminster, Saskatchewan, is one of 16 ethanol plants operating in Canada. The 130 MMgy plant produces ethanol using wheat.


Iowa RFA pushes for state E10 mandate A new study citing the positive contri-

bution of the biofuels industry to Iowa’s economy has drawn interest from those in the ethanol industry, and action from leg-islators. The study, titled, “Contribution of the biofuels industry to the economy of Iowa,” was issued in January and ranks Iowa as the nation’s leader in biofuels out-put, with ethanol from the state account-ing for nearly 30 percent of U.S. ethanol production. According to the study, Iowa is expected to benefi t from continued expan-sion and development in the industry over the next decade, but the Iowa Renewable Fuels Association notes an ethanol shortfall in the state. “Iowa is lagging behind the rest of the country in ethanol use,” Monte Shaw, executive director of IRFA said. “Ethanol fuel blends sold in Iowa remain close to 75 percent while the rest of the nation stands at 80 percent.”

Now, new legislation passed by the Iowa State Senate Agriculture Committee has Iowa one step closer to catching up with the rest of the nation. At the IRFA Summit held in January, Shaw spoke on ethanol’s impact to Iowa’s economy and ref-erenced the study. According to the study, done by LECG LLC, ethanol and biodiesel make up 8 percent of Iowa GDP, or about $11.5 billion. The IRFA also proposed an E10 mandate requiring all motor vehicles to use the 10 percent blend. In 2006 the IRFA proposed a similar mandate predicated on boosting E10 use and after four years, it ap-pears legislators are listening.

The E10 Fuel Quality Standard legisla-tion (SF107) was go to the full Senate after passing a voice vote in February. The bill, which would require all gasoline sold for highway use (exemptions from highway use include outboard motors, power tools and

lawn equipment) contain at least 10 percent ethanol, was initially introduced by Sen. Jack Kibbie. “Iowans should be proud of their renewable fuels industry,” Kibbie said. “People need to understand that without ethanol, corn and farmland would be worth about half as much as they are today.”

According to the LECG study, locally-owned ethanol plants make up a full third of production capacity, and account for al-most half of the existing ethanol fuel plants in Iowa. To produce 3.2 billion gallons of ethanol, the industry spends roughly $5 bil-lion, mainly on corn used to produce etha-nol.

Shaw expects the bill before the Iowa legislature will aid ethanol in securing a new segment of the market if the U.S. EPA ap-proves an expanded blend limit from 10 percent to 15 percent. “The expansion to E15 won’t mean a hill of beans if there is


no incentive for retailers to pump it,” Shaw said. Although bills such as SF107 have ap-peared before, some note that there is now a change in thinking. Sen. Thomas Courtney said people fi nally recognize the positive im-pact of ethanol. “People have learned that ethanol works. This idea that it harms your engine is BS.”

Even with the changed attitude and fi rst-round success of an E10 mandate in Iowa, Shaw believes there are still prob-lems to address. “We’re obviously pleased,” Shaw said. “But this was the fi rst step in the long process.” One of the problems Shaw pointed out relates to the new RFS2 ruling. “By declaring that corn ethanol achieves the necessary GHG reductions,” Shaw said, “it will allow corn ethanol production beyond the 12 billion gallons that were grandfa-thered. Over time, some plants may expand or there may be new projects that take the

capacity closer to the 15 billion gallon cap for corn ethanol.” But IRFA believes the idea of an arbitrary 15 billion gallon cap is a long-term problem for the corn ethanol industry and needs to be addressed.

Shaw and others remain hopeful the E10 mandate will ultimately pass. Rep. An-nette Sweeney echoed a sentiment among many in the state legislature. “I know there’s interest in the bill,” she said. “And there will be more once the case is made for how im-portant the ethanol industry is to Iowa.” Unfortunately, in mid-March news reports indicated the bill died before reaching a Senate vote after Senate leadership chose not to schedule a debate on the bill. “This is very disappointing,” Shaw said. “I think we had the support. But if the bill isn’t brought up for debate there’s little we can do.”

—Luke Geiver

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Monte Shaw, executive director of the IRFA, speaks at the IRFA summit about the problem of the 15 billion gallon cap for corn ethanol in the national renewable fuels standard.

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This year’s delayed harvest presents farmers and ethanol producers with several challenges—from dealing with high moisture corn to testing moldy corn for mycotoxins.

By Holly JessenETHANOL PRODUCER MAGAZINE April 2010 45

CORN

Corn growers brought in an-other big harvest, with record yields reported in spite of a late spring. But delayed plant-

ing brought a delayed harvest, and with it a big year for wet corn. Paul Bertels, direc-tor of economic analysis for the National Corn Growers Association, says he heard of farmers taking off corn anywhere from 14 to 40 percent moisture in the nation’s 2009 harvest. The Renewable Fuels Association reported it too. “Initial 2009 harvest reports in many locations show grain moisture rang-ing from 25 percent to 30 percent, as op-posed to the more typical harvest levels of 18 percent to 23 percent,” according to a RFA report on corn quality.

All that wet corn creates problems for many ethanol plants. Glacial Lakes Energy LLC, a 100 MMgy ethanol plant in Mina, S.D., typically accepts corn of 16.5 percent moisture or lower. This year the corn com-ing in was a couple percentage points higher. At maximum, the plant’s hammer mills can handle about 18 percent moisture corn be-fore the wet corn gums up the works. “That’s probably even pushing it,” says Jason Wam-bach, corn merchandiser at the plant.

Although most ethanol plants don’t have on-site corn dryers, Glacial Lakes is in-stalling one as well as increasing storage ca-pacity and adding a receiving pit. The $2.75 million project, which was fi nanced partially through state economic development mon-ey, was on track to be completed in March. Glacial Lakes-Mina made the decision to in-stall the dryer because 2009 was the second wet year in a row. In fact, Wambach says, in 2008 the ethanol plant had to shut down ethanol production for a few weeks while waiting for corn to be dried off site. “This year we didn’t have to shut down,” he says, “but we did have to trim down.”

RFA listed several things besides drying the corn that ethanol producers should be aware of in a high moisture year, including the importance of visual inspection, sam-pling and grain grading, testing for myco-toxins, grain cleaning, dust suppression and quality assurance of distillers grains.

Wet Start to FinishThe trouble started when planting got

off to a slow start in 2009. Farmers were kept out of wet fi elds by cool temperatures and frequent rain showers. By May 10, corn planting in the 18 major corn states was only 48 percent complete—signifi cantly behind normal, according to USDA’s 2009 crop production summary.

That, in turn, delayed harvest. The fi nal crop progress report came unusually late, on Dec. 22, says Anthony Prillaman, National Agricultural Statistics Service agricultural statistician. At that time, 95 percent of the U.S. corn crop was estimated to be har-vested, with 5 percent remaining in the fi eld. North Dakota, which was hit the hardest by a late planting season and delayed harvest, only had 68 percent of its corn crop har-vested by Christmas.

With such a late harvest, it was very diffi cult to dry down that corn naturally. By November, fi eld drying nearly stops com-pletely, Bertels says. Corn that is more than 16 or 17 percent moisture needs heat to dry. If it doesn’t, it quickly spoils. The high mois-ture corn coming in this year strained farm-ers and grain elevators that didn’t have the needed drying capacity.

David Spickler, commodity manager for Blue Flint Ethanol, a 50 MMgy plant in Underwood, N.D., says the season started off with a mycotoxin scare that spooked dis-tillers grains customers who demanded test-ing to prove toxin levels were under the ac-ceptable limit. “Almost all of the corn we’ve brought in has had some sort of mold on it,” he explains. Blue Flint put testing proce-dures in place very rapidly to meet the unex-pected need. Fortunately, testing revealed the problem wasn’t as bad as feared. Up through February, the plant hadn’t found mycotoxin levels anywhere near the limit, Spickler says. “We’re going to be diligent in testing,” he adds. “We’re still testing every day.” In fact, they’ll probably continue testing their corn for mycotoxins until the remainder of the 2009 corn crop is used.

The next concern is storage damage— something Blue Flint started seeing as early as late January. As the months progress, no-body is really sure what the corn will look

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like coming out of storage. “It’s defi nitely a concern what this looks like when we get to May, June, July, August,” he says.

Monitoring Stored GrainWith 65 percent of Iowa’s corn supply

going to ethanol production, Charlie Hur-burgh, an agricultural engineer and grain storage expert, pays close attention to how high moisture corn has affected ethanol plants. The professor at Iowa State Univer-sity runs the extension program on grain quality. In Iowa, as in most states, corn yields were good but moisture content was way up.

There just wasn’t enough drying capac-ity to deal with all that wet corn. As a result, some people handled incoming corn well, while others fell fl at on their faces. “There have been a number of instances of out-door piles of corn spoiling, literally spoiling, turning black or brown,” Hurburgh says.

In past years, 15 percent to 16 percent moisture was considered safe storage. This year, the best case scenario was drying corn to at least below 20 percent, putting it into storage with aeration and getting it cold to the point of freezing, he says. The thing to

keep in mind is that if corn goes into stor-age with toxins on it, it will come out with toxins. “This year’s corn has about half the storage life as normal corn,” he tells EPM.

It’s not so much of a problem in Iowa, but Hurburgh has heard stories of 10 times the FDA limit of vomitoxin on corn. This toxin got its name from what happens when livestock eats vomitoxin-contaminated grain. “A pig eats too much of it, guess what he does,” he says.

All this adds up to a need for vigilance on the part of ethanol plants. The fact is, due to the value of corn, sellers have an incentive to blend bad corn into good corn. Hurburgh stresses that ethanol plants need to pay close attention to the quality of the corn coming into their plants—perhaps even using a third party grain grader. “Don’t have your sloppi-est guy doing the grading this year,” he says. “If [ethanol plants] don’t pay attention, I’ll level with you, sellers of grain understand very quickly which plants are grading well, and which aren’t.”

Hurburgh actually sees this as a good thing for the health of the industry. The fact that there wasn’t enough corn storage and drying capacity this year will prompt building

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and expansion. And, if the ethanol indus-try consistently demands good quality corn supply and rejects poor quality corn that will be good in the long run too. “That’s going to force some changes all the way through the system,” he says.

All Dried Up So what happens when corn is aggres-

sively dried down in a high moisture year? Will that have any effect on ethanol out-put? Researchers from Novozymes, Randy Deinhammer, staff scientist, and Anne Glud Hjulmand, director of research and development, described an experiment that started with whole corn dried under mild conditions. The corn was rehydrated to the moisture level farmers were fi nding in the fi elds this fall and then dried back down to 85 percent dry solids, representing typical corn coming into an ethanol plant.

The variable in the lab experiment was the temperature the corn was dried at, Dein-hammer says. Corn was dried at 120 degrees Fahrenheit, 170 degrees and 230 degrees. After that, researchers turned the corn into ethanol in the lab, grinding it with a ham-mer mill and utilizing Novozymes enzymes in the conversion process. The researchers found as drying temperatures increased, the accessibility of starch in the ethanol decreased, resulting in reduced outputs of ethanol. For one thing, the amount of free sugar in the fermentation mash was re-duced, he says. Secondly, the product started browning, which could also result in lowered ethanol yields. With corn dried at the highest temperature, at 230 degrees F., there was a 3 percent loss in ethanol yield. “The more ag-gressively you dry the corn, the more etha-nol you lose,” Hjulmand says.

The other variable in the experiment was the type of glucoamylase used. The Novozyme researchers did fi nd that using a premium product did increase ethanol out-put, but could not overcome the entire loss. “It’s something that is happened during the grain drying process,” says Hjulmand. “You cannot repair it 100 percent.” EP

Holly Jessen is associate editor of Ethanol Producer Magazine. Reach her at (701) 738-4946 or [email protected].

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Setting Boundaries with the Low Carbon Fuel StandardDespite strong opposition, in January, California approved implementation of a low carbon fuel standard. The California Air Resources Board is now preparing biofuel producers for compliance and anticipates many challenges in ensuring fairness and accuracy.

By Anna Austin


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California Gov. Arnold Schwarzenegger's 2007 execu-tive order called for a reduction of at least 10 percent in the car-

bon intensity of California's transportation fuels by 2020, while instructing the Califor-nia Environmental Protection Agency to coordinate activities between the University of California, the California Energy Com-mission and other state agencies to develop policies to meet the 2020 target.

Considered a large hit to the oil indus-

try—as, according to the CEC, California alone uses more gasoline and diesel than any country in the world besides the U.S. as a whole—the California policy also negatively affected the corn-based ethanol industry. Groups such as the Renewable Fuels Associa-tion and Growth Energy have fought against it since its inception. In December, those groups and others fi led law suits against the California Air Resources Board, on grounds that the low carbon fuel standard (LCFS) would virtually eliminate domestic ethanol

and counter state goals to reduce carbon emissions from motor vehicles, claiming a blatant disregard for current information re-lated to the lifecycle greenhouse gas (GHG) emissions associated with corn ethanol that have resulted in signifi cant overestimation of its carbon intensity. The groups claim Cali-fornia’s LCFS interferes with federal law, and is contrary to the Constitution’s Commerce Clause.

Still, the California Offi ce of Ad-ministrative Law approved the LCFS for

implementation in mid-January, and the fi rst reporting date is quickly approaching. Meanwhile, CARB is moving forward with educating and preparing California biofuel producers. Renee Littaua, manager of CARB fuels section, says the fi rst reductions aren’t required until 2011, but the fi rst reporting re-quirements are due by July 1—pushed back a month from the original date.

Complying with LCFS“CARB recently posted a

draft biofuel producer registra-tion form, and we’re requesting public comment,” Littaua says. “In February, registration started with information on plant processes—information about co-fi ring, fuel used at facilities, feedstocks used, coproducts produced—and an explanation of the physical path-way a producer’s fuel takes to gets to California.” A producer will be required to provide a map to CARB explaining how

their fuel/feedstock gets to the plant loca-tion, and will choose the appropriate carbon intensities from a look-up table CARB has provided, based on information about their facilities and feedstocks.

CARB will take biofuel registrations from February to May according to Littaua. Though California will need more advanced biofuels to meet the standard, she says, con-

ventional biofuels are expected to play a continued role in the state fuel market.

The LCFS requires a grad-ual reduction in carbon-intense fuel, and is weighted toward later compliance years, when CARB believes the standard will be met with new, advanced bio-fuel facilities. “We projected 24 new potential biofuel facilities in California by 2020, including 18

new cellulosic ethanol and six new biodiesel facilities,” Littaua says. CARB continues to develop the LCFS, with a board of experts

seeking the best science available and though progress is being made, she adds, there are many issues hanging such as developing accurate and fair biofuel carbon life-cycle analyses.

University of Cali-fornia-Davis researcher Alissa Kendall says some key challenges have emerged as biofuel life cycle analyses have been implemented in California and questions that need to be answered before biofu-el carbon intensity can be accurately certifi ed.

Key ChallengesA biofuel life cycle is different than oth-

er life cycles, according to Kendall, as farm activities such as cultivation, growing and harvest are combined with industrial activi-ties and the natural environment, making the system harder to model than an engineered one. “Life-cycle [analysis] is simple in terms of steps, but when we actually account for all the different inputs and outputs of the sys-tem, it gets complicated fast,” she says.

As many facilities use aggregated inputs from many suppliers, things get complicated when determining what kind of emissions went into producing each of the feedstocks and biofuels. “Can we capture that geo-graphic variability that we need to get these verifi cations right?” Kendall questions.

GHGs for imported biofuels present a whole new challenge because it’s nearly im-possible to verify the accuracy of data col-lected, she adds. “It’s going to be even harder to fi gure out where things are grown, where they’ve been moved and all other steps in the biofuel lifecycle. I think this is going to be a really big challenge and it might mean that we end up only being able to certify biofuels from large industrial partners who are able to go through our certifi cation process.”

Another outlying question from biofuel producers is how market-mediated effects of producing biofuels are reliably calcu-lated, with proper consideration of how co-products are valued and credited. “Climate

POLICY


Renee Littaua manager, CARB fuels section

Alissa Kendallassistant professor, civil and environmental engineering, University of California-Davis

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transparency on assumptions behind how the study does coproduct allocations, and if you do it statically, it probably isn’t applicable two or three years down the road. So we have this challenge—to fi gure out how to do coprod-uct allocation more transparently and more dynamically so it refl ects real market condi-tions.”

Beyond lifecycle complexity, geographic variability and coproduct accounting, there are more issues to consider.

Carbon for ThoughtA problem with impact assessments, a

key element of biofuel lifecycle analyses, is that they are usually performed without spatial or temporal information, Kendall says. “For climate change gases it seems it’s okay, mostly because when putting CO2 in the atmosphere it doesn’t matter where, it essentially has the same effect, which is much easier than criteria pollutants which are spatially dependent.”

When predicting impacts, how far into the future should they be projected? “For global warming we look at 100 years, which I think is too far,” she says. “Looking at cli-

mate change emissions and changing them into CO2 equivalent, we always use 100 years and this is something we might want to re-consider. The impact of GHG scales with the time it has to sit in the atmosphere and act, and we often ignore this in studies. And, what happens when we address the timing and GHG emissions from capital invest-ments, things such as machinery and plants put up to produce biofuels. If I account for the timing of these investments, the GHG intensity CO2 equivalent per liter goes up. In the case of cellulosic ethanol, it goes up by 10 percent. Time matters, and as we get bet-ter at producing low carbon fuels, the timing for these capital investments becomes very important. We need to decide whether we’re willing to ignore time.” EP

Anna Austin is a BBI International as-sociate editor. Reach her at [email protected] or 701-738-4968.

change-related policies and efforts tend to just focus on GHG emissions and don’t consider coproducts such as distillers dried grains (DDGs),” Kendall admits. “This is a valuable resource and we want in some way to credit the ethanol for the produc-tion of DDGs. We assume the DDGs have some value in the market that will displace the essentially ‘business as usual’ products in the market—in this case, cattle feed, which is usually corn and soybean meal. If I introduce DDGs into the market then I displace all of the soybean meal and some of the corn, so ethanol will be credited for displacing these products in the market.”

There is a caveat, however, as markets change dynamically. “If I introduce a huge quantity of DDGs, it suppresses feed pric-es and meat is cheaper so people eat more meat, upping demand and suddenly I’ve expanded my market for feed and meat rather than displacing something from the market,” she says. “Another problem is that coproducts are known to not displace any-thing, just create a new market for a mate-rial. One of the biggest challenges is when you look at these studies, there is very little


EMISSIONS


Measured The U.S. EPA will begin requiring participants of its mandatory greenhouse gas emissions reporting program to use prescribed methods on April 1. How do these methods differ from the best practices that have been used until now and what changes should producers look out for in the future?

By Kris Bevill


EMISSIONS

EXPECTATIONS

The word “fl exible” doesn’t neces-sarily spring to mind when de-scribing U.S. EPA regulations. The agency is known more for its hard-

line stance on following the rules, but perhaps that is because EPA rule usually isn’t a lead-in for future regulation, as is the case for its green-house gas (GHG) emissions reporting rule. The Mandatory Reporting of Greenhouse Gases Rule required all identifi ed participants to begin collecting emissions data using “best available monitoring methods” on Jan. 1. The agency stresses that its goals for this program are to be fl exible with reporters while at the same time acquiring the most accurate data available. By early February, most reporters seemed to have a handle on what was expected of them, but it remains to be seen just how fl exible the agency really is when it comes to implementing the re-quired reporting procedures.

Starting April 1, participants who have not received an extension must begin using the EPA’s required monitoring methods to mea-sure emissions. The EPA plans to analyze the emissions data on an annual basis beginning March 31, 2011, and use it to develop a range of potential Clean Air Act GHG policies and

programs. It is vital the agency obtain the most consistent and accurate data possible, which is why it developed the required emissions moni-toring methods.

When fi nalizing its methodologies, the agency considered the short timeframe par-ticipants had for compliance as well as existing methodologies available through other emis-sions reporting programs. “Our view was that we did not need, in most cases, to reinvent the wheel,” says Bill Irving, chief of the program integration branch in the EPA’s climate change division. “We looked at the purpose of the rule, which was to provide rigorous and accurate in-formation on economy-wide emissions for the development of future policies and programs under the Clean Air Act [and] we noted that we had an accuracy requirement, but also that this was not a cap and trade program or other reduction program. We think the outcome strikes an appropriate balance in terms of ac-curacy and cost to the reporters. There is not full fl exibility with these methods—we do need a base level of accuracy and rigor. But within certain subparts there are choices refl ecting the circumstances of different types and sizes of facilities. We think that’s a good thing.”

Who, What and HowSo what are these choices and methods?

As EPA standards go, it’s complicated to say the least. There are approximately 42 source categories for emissions and each has its own required monitoring methods, as outlined in the EPA’s 261-page fi nal rule. “It’s one of those ‘devil in the detail’ things where you really need to go to the specifi c source category to fi gure out what your compliance obligations are,” says Jonathan Dettman, a partner at Minneapolis-based Faegre & Benson LLP and lead lawyer for the fi rm’s climate change and sustainability prac-tice. Because ethanol was left out of the fi nal rule as a source category, only producers whose facilities emit more than 25,000 tons of carbon di-oxide equivalent (CO2e) annually from stationary combustion sources are required to participate in the reporting pro-gram. Those producers are lumped into the EPA’s general stationary source category for

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reporting. The stationary source category cov-ers about one-third of all of the approximately 10,600 facilities subject to the rule. “It’s a pretty signifi cant category and even that category is split out into four separate tiers depending on what sort of facility and the size of the facil-ity and the amount of emissions that a facility may have,” adds Dettman.

Tier 1 of the stationary source category allows the reporter to use company records to show annual fuel consumption. Those re-cords, together with fuel-specifi c default high heat values and default CO2 emission factors, can be utilized to calculate annual emission rates. Tier 2 also allows company records to be used to demonstrate annual fuel consumption, but also requires measured fuel-specifi c high heat values along with default CO2 emission factors.

Tier 3 begins the required use of mea-suring equipment. Producers in this category may use company records to show annual fuel consumption for solid fuels, but must use fuel fl ow meters to measure liquid or gas fuel con-sumption. In addition, Tier 3 participants must periodically measure fuel carbon content.

Tier 4 is the most stringent reporting

category for stationary combustion sources . Reporters at this level must use Continuous Emission Monitoring Systems for data col-lection. However, the EPA is giving facilities additional time to upgrade their CEMS by al-lowing them to use lower tier level calculation methods for 2010. All Tier 4 reporters must begin using CEMS on Jan. 1, 2011.

The good news for ethanol producers who must report is that the vast majority fall

into Tiers 1 or 2 of the rule, which allows for the simplest compliance measures. “The ethanol facilities that we’ve worked with are all falling into Tier 2,” says James Wu, GHG ser-vices manager at Air Resource Specialists. His company has advised approximately 20 etha-nol producers on reporting compliance, at fa-cilities with production capacities ranging from 50 MMgy to around 100 MMgy. “The plants that produce 100 MMgy or more have the po-

EMISSIONS

Number Covered of

Entities

Share Share ShareFirst Year Capital Costs

(Million)

First Year Total Annualized

Costs (Million)

Estimated Covered Entities, Emissions and Costs by Subpart (2006$)

Subpart

Subpart C General Stationary Fuel Combustion Sources 3,000 220.0 6% $10.5 27% $25.8 20%Subpart H Cement Production 107 86.8 2% $5.4 14% $6.8 5%Subpart S Lime Manufacturing 89 25.4 1% $4.9 12% $5.3 4%Subpart Y Petroleum Refineries 150 204.7 5% $1.6 4% $6.1 5%Subpart AA Pulp and Paper Manufacturing 425 57.7 2% $14.8 37% $8.6 7%Subpart HH Landfills 2,551 91.1 2% $1.3 3% $12.4 9%Subpart NN Suppliers of Natural Gas and Natural Gas Liquids 1,502 0.0 0% $0.0 0% $6.8 5%Subpart QQ - Motor Vehicle and Engine Manufacturers 317 NA NA $0.0 0% $8.6 7%Coverage Determination Costs for Non-Reporters NA NA NA NA NA $17.2 13%

Downstream Emissions

(million metric tons, CO2

equivalent)

SO

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tential to be kicked into Tiers 3 or 4, however, they pipeline natural gas so they’re exempted [from those tiers],” he says.

No Big Deal?Because the required monitoring meth-

ods for Tiers 1 and 2 of the stationary source category allow the use of company records, it’s expected that compliance shouldn’t be diffi cult for ethanol producers. However, every kind of compliance comes with a cost. The EPA es-timates that total national annualized cost for participants in the fi rst year will be $132 million and $89 million in subsequent years. Stationary combustion sources are expected to incur ap-proximately 26 percent of the costs in the fi rst year. This equates to just “cents on the ton” according to Irving. However, Dettman points out that the EPA might not have considered the indirect costs of compliance in its calcula-tions.

“While the EPA appears to have done its homework, it remains to be seen whether the implementation costs of this new rule will be

as advertised,” he says. “In terms of monitor-ing equipment, it isn’t really expensive. But I don’t know if the EPA is factoring in the other compliance costs that may go with it. For ex-ample, implementing a system within a facility to systematically gather this type of data may mean developing record-keeping requirements or systems. There’s also a learning curve. The initial expense for the fi rst couple of years may be greater in terms of investment of personnel and time. So, there will be some upfront invest-ment for companies, especially those that fall within the more rigorous requirements. These are regulatory compliance obligations and com-panies are going to want to be sure they get this right. That’s going to involve some investment on their part.”

Wu says that while compliance may not be exactly diffi cult, managing it might be a bit more than a typical plant manager can handle. “It’s not overly complex—the EPA has clari-fi ed some aspects of the rule— but it’s diffi cult for a plant manager to track something that’s very new and still being clarifi ed by the EPA.”

He adds that once the ethanol-specifi c cat-egory becomes fi nalized, there will probably be more requirements for producers.

Noncompliance and Future Considerations

The EPA has endeavored to educate program participants on the reporting rule’s requirements. In February, the agency said it had connected with 6,500 people through webinars and seminars disseminating com-pliance details to those affected by the rule. “We think it is critical to get the understand-ing of the provisions and rule out there to the affected sources,” Irving says. “That’s by far the most important thing for ensur-ing compliance with the rule. [However,] it’s inevitable that there’s not always 100 percent compliance with every rule.”

Noncompliance can range from failure to report to failure to calculate emissions following the specifi ed methodologies. The Clean Air Act allows fl exibility in determin-ing the appropriate punishment for non-compliance, according to Irving. The agen-cy will take a facilitative approach as its fi rst step and save the maximum punishment, fi nes of $37,500 per day, as a last resort.

While producers begin collecting data on their stationary combustion sources this year, it will be important to keep an eye on changes to the current rule and possible ad-ditional compliance measures for 2011. The EPA continues to evaluate ethanol as a spe-cifi c source category and expects to issue its fi nal decision later this year. This could mean producers will be responsible for collecting more data on emission sources throughout their facilities and the category could be expanded to include plants not currently required to report. Also, pending legislation could change the rules. “It was Congress that requested this rule and if they give us more instructions then, yes, we’d have to come back and look at whether this report-ing program meets all the requirements of any additional Congressional action,” Irving says. EP

Kris Bevill is an editor at BBI Internation-al. Reach her at [email protected] or (701) 850-2553.

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USE

ETHANOL: GROWING IT, BURNING IT AND BREAKING RECORDSA home-grown, corn-fueled race car tops 255 mph on Rockett Brand E85.

By Luke Geiver



USE

The Bonneville Speedway on Utah’s baked white Salt Flats

should be the last place to find a farmer from Okla-homa. But Brent Hajek, a farmer and self-proclaimed gearhead from Ames, Okla., doesn’t always do what he should. On Oct. 11, Hajek, hundreds of miles away from his 4,000-acre farm, in the middle of harvest, watched his dream vehicle speed across the flat earth at the Utah racetrack. The E85-powered Ford Mus-tang built by Hajek and his gearhead crew set a land speed record at just over 255 miles per hour. Now, Hajek believes that by breaking records in an E85-powered Mustang, he’s showing that the future of ethanol is coming fast.

As a third generation farmer, Hajek started the development of the Mustang to promote his product, corn. “I started this because the service sta-tions around me offered no ethanol,” Hajek says. “They say ethanol doesn’t perform, is hard on your engine. As a farmer I wanted to promote my crop. And, I like a good challenge.” Hajek’s challenge, building a race car capable of going fast, burning ethanol and break-ing records began as a gearhead farm-er’s fantasy and now has the attention of such companies as Ford Racing Co., Monsanto, and Rockett Brand Racing Fuel, which have supported the project in different ways. “We got MIT gradu-ates, we got engineers, scientists, it is just amazing. Gearheads out here in the middle of nowhere, we can meet in the middle and come up with some amaz-ing stuff,” he says.

The Right Stuff

While Hajek was hatching his dream in Oklahoma, Illinois-based Rockett Brand was developing an etha-

nol racing blend suitable for high performance vehicles. “We had to develop a consis-tent E85 blend because the racers wanted that. They were using the pump E85 and want-ed a more specific blend,” says Rockett Brand President Jack Day. Racers were hoping to uti-lize the higher octane and cool-ing qualities of E85 fuel to gain an edge in competitive racing, he explains, and because each blending station carries a dif-ferent formulation of E85, the inconsistencies from blend to blend were making it difficult to tune the cars and optimize the qualities of the alcohol in E85. Combined with other uncontrollable variables such as weather or air temperature, the race teams expecting posi-tive results from ethanol fuel

were not getting what they wanted. “In a race car, there are so many variables,” Day says, “The car, the tires, the track.” When Rockett Brand set out to develop a higher quality E85 fuel they kept one goal in mind, consistency. Day explains that a consistent fuel lets you focus on the variables you can’t control. “We know how it is going to perform before it ever gets to the races,” Day said, “and ultimately, it gives a higher horsepower opportunity at a lower cost.”

“We had developed the fuel and hooked up with Brent very early in the game,” Day says. Hajek likes the cost of fueling his high performance Mus-tang with E85, and to truly promote his product, he provides corn from his own fields to make the ethanol used in his car. Now, the Illinois-based company president and the Oklahoma farmer are record breakers. And the feat was not in a special class for ethanol-specific fuel, which shows the potential and ability of ethanol, according to Hajek. “You are either in the gasoline class, or fuel class, and fuel means about everything. We are lobbying for an ethanol class right now.” The Mustang competed in

USE


Brent Hajek farmer/gearhead, Hajek Motorsports

Jack Day president, Rockett Brand Racing Fuels

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Bearingsthe open fuel class at Bonneville, going against blends such as nitro-methane.

Using E85 was a major reason the Mustang reached such high speeds, Hajek adds, because ethanol burns cooler. “The more air going through the car the more drag. We were able to actually block off the front of the ve-hicle to avoid that drag.”

The Right DriverAnother facet of Hajek’s love of

racing contributed to finding the right driver to help break the record. Hajek has created a museum devoted to cars in the old school building in his home town. The museum in Ames showcases models driven by everyone from Dale Earnhardt to Jungle Jim. “So many of these junk cars from my heroes you could buy for nothing years ago. No

USE


Hajek's and Danny Thompson’s work on the E85 Mustang has drawn attention from major motor companies and small farmers alike.

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one was collecting muscle cars back then,” he says. Today the museum continues to add models even though Hajek notes the prices of the cars he’s looking for are dramatically higher.

One of the museum cars—a 1969 Mach 1 Mustang driven by racing legend Mickey Thompson—inspired Hajek in finding a driver for the 2009 Mustang. Forty years after Mickey ran a blue Mach 1 on the barren Bonnev-ille track, Hajek thought it fitting to put Mickey’s son Danny Thompson behind the wheel of the souped-up car. To explain the significance of reaching a speed well over 200 mph, Hajek adds, “There are more people that have scaled Mt. Everest than are in the Bonneville 200-mile class.”

Setting the land speed record has those outside of racing circles watch-ing. Last year Hajek spoke at the World Ethanol Summit in Sao Paulo,

Brazil. “The people down there were really supportive and excited about ethanol. The thing they were most concerned about was the food thing,” he says. Most of the questions he an-swered during the summit dealt with the food versus fuel debate, although he adds that in all of his time spent developing, running, and promoting his E85 Mustang, everyone other than those worried about food have been supportive. “It amazes me how recep-tive everyone has been in the whole process. The fact that I’m a farmer and doing something green is cool to people. We have mutual respect from other racers and the scientists and en-gineers are watching to see what we can do.” As for answering those at the summit worried about food, he says he’s learned through his days in farm-ing, “We could cover this world up with corn.”

To continue his allegiance to ethanol, Hajek has begun produc-tion of a new fl ex-fuel race car, a 2011 Mustang. This time Hajek is going further with biobased prod-ucts. Along with the use of E85, the car will be made with bioplastic side panels provided by Ford. “The hood and fenders are all soy-based plas-tic. The advantage to the soy plastic body panels is the weight. The soy is lighter and not petroleum-based plastic. This stuff is renewable, more earth friendly,” he explains. As for Rockett Brands involvement, Day says the partnership will continue, along with the production of E85 racing fuel. “We see an opportunity with this fuel. When the fuel is used as it supposed to be used, it does what it is supposed to do.”

A trip back to Bonneville to attempt new records at the track is planned, although Day, who’s been to the speedway before and says ev-eryone should visit the track at least once, doesn’t know if he will be there for the next record breaking attempt. “Whether I’m there or not the fuel is going to perform.”

As for Hajek being there to watch the newest version of his dream car on the salty ground in Utah, he does have chores to do at his farm, but, he’s shown to be anything but the typical Oklahoma farmer. “He is what this sport needs,” Day says.

When asked about the possibil-ity of his own cars earning a spot in the Hajek Motorsport Museum in Ames he responds, “We are out of cars to collect. We have taken these new cars, the Mustangs, and made our own history.” EP

Luke Geiver is an associate editor of Ethanol Producer Magazine. Reach him at (701) 738-4944 or [email protected].

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June 14, 2010St. Louis,

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Ethanol is gaining wide pop-ularity as an alternative fuel as the value of diminishing crude oil re-serves increases and research is di-rected toward the possibilities of employing biomass materials for fuel. Current U.S. policies are mo-tivating ethanol dehydration com-panies in Central American and Caribbean countries to increase production capacity either by starting new plants or expanding existing ones. Expansion is often preferable as it usually involves a better ratio between throughput expansion and capital costs than new construction. Besides that, a plant upgrade will take less time than building an entirely new unit.

Central American and Carib-bean countries import relatively high quantities of ethanol, nor-

mally from Brazil, although little is destined for domestic consump-tion. These countries reprocess the product, usually converting hydrated ethanol into anhydrous ethanol and then exporting it to

the U.S. Not only is value added to the product through dehydra-tion, but the stopover and further processing means the ethanol be-ing exported to the U.S. avoids the 2.5 percent duty and 54 cent-per-

gallon tariff on Brazilian ethanol, thanks to the trade agreements and benefi ts granted by the Ca-ribbean Basin Initiative and the Central American Free Trade Agreement. The CBI limits the

Expanding Ethanol Dehydration A number of alternative methods are available for debottlenecking cooling water systems and the molecular sieves that are used for ethanol dehydration.

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

DEHYDRATION. BY FELIPE TAVARES, JANSLEY PASCOAL AND BRUNO MAIA

Contribution

Figure 1. Percentage of Fuel Ethanol U.S. Imports


total amount of ethanol allowed to be exported to the U.S. to just 7 percent of the previous year’s entire domestic consumption. To date, all CAFTA nations com-bined with CBI countries have not come even remotely close to meeting this gap. Nevertheless the percentage of U.S. imports from CBI and CAFTA nations have rapidly increased in recent years (see Figure 1).

Ethanol is readily produced through fermentation yielding a dilute aqueous solution of etha-nol, normally 8 to 10 percent by weight. Further concentration of the ethanol by traditional distilla-tion processes produces an azeo-trope containing about 5 percent water by weight. Azeotropes are a mixture of two or more liquids that cannot easily be separated by distillation. To prevent phase sep-aration during storage, ethanol-blended gasoline should contain at most only small amounts of water, generally 1 percent or less by volume. Thus, ethanol used in the U.S. for blending must be substantially anhydrous.

The energy requirement for fi nal azeotropic distillation to achieve anhydrous ethanol is very high, and various means for a more energy-effi cient dehydra-tion process have been reported. Most current ethanol dehydration facilities rely on hydrophilic zeo-lite molecular sieves. Zeolites can be both size- and sorption-selec-tive for water, thereby achieving a high selectivity for water, par-ticularly 3A zeolites that exclude ethanol but not water.

Cooling Water System Issues

Debottlenecking improves profi tability if one is aware of specifi c issues and targets the right improvements. In many projects the cooling water system

is the production-limiting factor. A number of design options for debottlenecking cooling water systems are outlined below. Pick-ing the best alternative is not a trivial task.

Upgrade cooling tower capacity: The obvious way that comes to everyone’s mind for im-proving the heat load removal in a process is to upgrade the cooling tower (CT). This can be made by installing a new tower cell or by replacing the entire tower with a new one with higher capacity and/or effi ciency.

Improve cooling tower maintenance procedures: Prop-er maintenance and operating procedures may increase CT per-formance without major capital expenditures. The performance of the CT depends not only on maintaining the proper water/air ratio, but it is also based on the assumption that the water and air are thoroughly mixed and prop-erly distributed, the most signifi -cant factors affecting the thermal performance of the CT.

Installation of air cooler: Air coolers can be installed in the process or in the water system before the CT to reduce the heat load of the CT, which in turn reduces water recirculation and thus increases the tower effi cien-cy by reducing cold and hot water temperatures. Special care should be taken with layout and installa-tion space, operation noise and electric energy consumption.

Installation of seawater heat exchanger: For facilities lo-cated near coastal areas, the use of cold seawater is yet another way to decrease the return tem-perature of the hot cooling water, with the cooling tower being re-placed with a cooler system us-ing cold seawater. Advantages in using seawater include a nearly constant quality in its chemical

More than ever, producersof ethanol are turning to Gamajet for better ways to clean their fermen-tators. The state of the art technology and cleaning devices developed by Gamajet are able to provide a level of durability and efficiency that is unsurpassed. By reducing clogging and maintenance, and utilizing less water, Gamajet devices are able to clean tanks faster and more effciently thanany other device available. To learn more, call today, or visit us on the web at Gamajet.com.

MoMore t thahann evevevererere , prrprprprodddododododucuccucucucererererere ssssssof ethanoll aarere t tururnin ng t too GaGaGamaamam jejejejej ttttt for better ways to clean theheirir f ferermem n-tators. The state of the art technology and


DEHYDRATION. BY FELIPE TAVARES, JANSLEY PASCOAL AND BRUNO MAIA

analysis, a nearly constant temperature and ample availability. The drawback of this alternative is the environmental impact related to the hot water dis-charged to sea.

Extraction of hot blowdown: If the cold blowdown is changed to hot blowdown, the heat load of the cooling tower is reduced because the fl ow rate to the CT is decreased.

Retubing of condensers: The overall heat transmission coeffi cient for stainless steel is 9.4 Btu per hour per foot per degree Fahrenheit (at 212°F), which is much smaller when compared with cop-per’s coeffi cient – 218 Btu/hr/ft/°F at 212°F. In this way, the replacement of stainless steel tubes by copper tubes would increase the condenser heat transfer effi ciency.

Replacement of condenser tube bundles: The change of the condenser’s tube bundle with another using a different geometry with more tubes would increase the heat transfer area surface, in-creasing the heat exchange capacity and decreasing


June 14, 2010St. Louis,

Missouri, USA

May 3rd

Upgrade CT Capacity

CT Maintenance

Procedures

Air Cooler

Seawater Heat Exchanger

Hot Blowdown

Retubing of Condensers

Replacement of

Condensers Tube Bundles

Direct Heat Integration

w/o Mech. Compression

Direct Heat Integration

w/Mech. Compression

Indirect Heat Integration

Figure 2. Comparative Analysis of Debottlenecking Alternatives

Various debottlenecking alternatives are rated on a scale of one to four (with one being low and four high) for capital cost, debottlenecking potential (DBN), energy effi ciency (steam economy), environmental impact (EHS concerns), the complexity of the project and expected time to com-plete the upgrade (execution duration). Blue dots mean direct relation (the more, the better for one’s project), while red dots mean inverse relation (the less, the better for the project).


the cooling water consumption considerably if the condensers are the bottleneck.

Consider Heat IntegrationIn general, plant modifi cations and re-

vamps that increase capacity and introduce other improvements will also change equip-ment design conditions which, in turn, lead to an offset between optimal and actual en-ergy consumption. An optimization study can point out ways to reduce energy consumption through improving process integration, often through simpler and more elegant heat re-covery networks that require less steam and cooling water. Heat integration usually incor-porates one of three methods:

1. Direct heat integration without me-chanical compression: A heat exchanger can be installed to totally condense a part of the dry-ethanol vapor stream leaving the molecu-lar sieves by exchanging heat with the hydrat-ed-ethanol feed entering the process.

2. Direct heat integration with me-chanical compression: The aforementioned direct heat integration can be boosted by the use of mechanical compressors. In this case, the dry-ethanol vapor stream leaving the molecular sieves is compressed, raising its temperature and allowing a higher energy exchange with the hydrated-ethanol feed en-tering the molecular sieves. The process cre-ates room for the condensation of more dry-ethanol vapor, increasing the debottlenecking potential. Furthermore, that compressed dry-ethanol vapor stream could be used, in part, to vaporize the regenerated ethanol from the molecular sieves.

3. Indirect heat integration: A heat ex-changer can be installed to totally condense a part of the dry-ethanol vapor stream. The condensation process will generate low-pres-sure steam that will be boosted by the high-pressure steam from boilers using an ejector-generating, medium-pressure steam that, in turn, will be used to vaporize the regenerated ethanol from molecular sieves and, option-ally, part of the hydrated-ethanol entering the process.

Increasing production from ethanol dehydration fa-cilities to accommodate grow-ing dry ethanol needs can be accomplished by building new units or by debottleneck-ing existing capacity. Even when new plant construc-tion is the ultimate answer, debottlenecking of existing facilities is usually examined

as an option and often is an attractive method for increas-ing production with minimal risk. The accompanying table presents a comparative analy-sis of each alternative report-ed here. (See Figure 2) EP

Felipe Tavares is president and CEO of Intratec Solu-tions LLC. Reach him at

[email protected] or (713) 821-1745. Jansley Pascoal and Bruno Maia are technical managers at Intratec Solutions. Reach them at [email protected] and [email protected].

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Developing next-generation biofuels, and marketing the tech-nology and resulting products, is an exciting and potentially very profi table enterprise. Much capi-tal is required to accomplish this, however investors may have legiti-mate concerns.

How can investment risk be reduced and profi ts increased? One approach is to establish and protect technology rights, and avoid losses by respecting rights of others. Technology rights in the form of patents and trade se-crets may be used to protect and increase market share by creating a signifi cant barrier to possible com-petition. Direct profi ts are avail-able through licensing.

This article provides a general

overview of technology rights, but given space limitations, certain de-tails, exceptions and topics are not discussed. For particular situations, readers should consult a properly licensed attorney.

Patents and Trade Secrets Defi ned

Patents are national govern-mental grants of the right to ex-clude others for a set length of time from making, using, offering to sell, selling or importing an in-vention in/into that country. Pat-ents often effectively give holders a monopoly in practice, but since patents provide a right to exclude others and not a right to practice per se, patents do not give true monopoly rights.

Trade secrets are information used in a business that may give it an advantage over competitors who do not know them. Multiple entities may legally hold or use the same trade secret if independently devel-oped, properly licensed or properly reverse engineered. There can usually be only one patent per invention per country, however, and licensing is limited accordingly. Many things can be trade secrets, from process technology to customer lists, while not patentable.

Unlike patents, trade secrets do not involve governmental

grants, but both are legally protected. To establish and main-tain trade secret pro-tection, a system is needed to keep se-cure, current and de-tailed documentation of the trade secret with access limited to “need to know” with-in the business (absent

a secrecy agreement). Trade secret rights are lost if the information becomes public. There may be civil remedies in the form of monetary damages and injunctions or cease and desist orders and criminal penalties available for trade secret misappropriation.

The concealment required to

Next-Generation Biofuels: Establishing, Protecting and Profiting from Technology RightsPatents and trade secrets may protect and profi t owners, but do they not guarantee a monopoly.

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

INTELLECTUAL PROPERTY. BY CHARLES R. RICHARD

Contribution

Charles R. Richardpatent attorney, Washington, D.C.


protect trade secrets and the public use that occurs when exploiting them may eventu-ally prohibit their patenting. There is even a danger that “Company A” might patent technology that “Company B” previously established as a trade secret, and “Company A” will then sue “Company B” for patent infringement.

Basic Requirements for U.S. Patents

There are few restric-tions on patentable subject matter, and patents may claim processes, machines, manu-factures, compositions of matter and improvements on these. “Products of nature” can raise subject matter is-sues, but such compositions enhanced by human involve-ment and processes for en-hancing them are frequently patentable.

There are three ma-jor patenting requirements found in sections 101, 102 and 103 of the patent code. Any indication of usefulness in the patent application is suffi cient to meet the utility requirement of section 101. The section 102 requirement for novelty defi nes “prior art events” that render an inven-tion unpatentable.

Although materials known for centuries, like eth-anol, are not patentable since they lack novelty, composi-tions containing them may be patentable. New processes to make “old” materials may be patentable also.

Section 103’s require-ment, non-obviousness, is based on the prior art events for novelty, but is distinct. A

patent will not be issued if differences between the in-vention and the prior art are such that the invention would have been obvious at the time of invention to a person hav-ing ordinary skill in applicable technology. The U.S. Patent and Trademark Offi ce usually makes an initial determination on a patent claim’s obvious-ness by determining whether all claim parts are present in the prior art (usually some assembly of patents or other printed publications), and whether there was suggestion there for the combination. An initial determination of obviousness by the USPTO can often be successfully challenged.

U.S. Patent Applications

To get a patent, an in-ventor fi les an application that must “pass” examination (get through “prosecution”) in the USPTO. Important application parts include the “specifi cation” (explaining the invention, uses, how it is made and practiced) and “claims” (which in fi nal form set the scope of any patent is-suing).

Applicants must give written description of their invention in their application and cannot later introduce amendments to the claims not supported by their original fi l-ing. The law requires that an application be “enabling”, that is, contain suffi cient in-formation for a person with ordinary skill to make and use the invention without “undue experimentation.” The appli-cation must also disclose the

best mode to carry out the invention contemplated by the inventor(s) at the time of fi ling; this best mode cannot be kept as a trade secret.

U.S. patent law also charges applicants with a “duty of candor” requiring applicants to disclose any prior art or prior art events discovered by time of fi ling or later until patent issuance. Failing to do so may render a patent unenforceable. While there is no prior art search re-quirement, a thorough search before fi ling is recommended since amendments regarding overlooked prior art may be impossible.

Applications are usually published after 18 months. Patent term is generally 20 years from the earliest fi ling date. By contrast, trade se-crets are private and without term limit, but rights are lost if made public.

Patent Infringement

Direct infringement is the unauthorized making, us-ing, offering to sell or selling a patented invention when/where a patent is in force, or importing the invention into a country when/where the pat-ent is in force. There may be liability for inducing or con-tributing to infringement by others, and even for certain activities outside the grant-ing country. Defenses may include claim invalidity and inequitable conduct (breach-ing the duty of candor) but ignorance of the patent is of-ten no excuse. Remedies may include monetary damages and injunctions.

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International Differences

Patent law worldwide is fairly consistent, while trade secret law is more variable. Pat-ents are only really effective in the country where granted, but most countries routinely grant patents on inventions made elsewhere upon proper appli-cation. The “absolute novelty” requirement is probably uni-

versal outside the U.S. Gener-ally in the U.S., “fi rst to invent” is the standard, and elsewhere “fi rst to fi le” is probably the rule. The duty of candor and best mode requirements are probably unique to the U.S.

Managing Technology Rights

Portfolios of technol-ogy rights may include patents

or trade secrets from one or more countries derived from internal research, licensed or purchased. Portfolios are man-aged to maximize value and can facilitate trade and manu-facture in the U.S. and abroad, while offering protection from competitors and bringing in li-censing revenue.

Separate business entities are often formed to develop

and market technology and resulting products such as next-generation bio-fuels, as well as to hold related technol-ogy rights. The type of entity selected may be important. For example, general partnerships may offer tax advantages and require few formalities, but do not shield owner personal assets. Classic corporations usually shield owner’s per-sonal assets from liability for corporate bad acts, but there are usually double taxation of profi ts and many formalities. Limited liability companies usually avoid double taxation, owners assets are gener-ally shielded from liability for LLC bad acts and formalities are often minimal. Regardless of entity, owners are usually personally liable for their own bad acts and taxes on profi ts received.

Businesses and specifi c technology rights may be owned by one or more en-tities. In the U.S., joint patent owners may exploit a patent without the permission and with no accounting to other owners, absent a prior agreement. Inventors are considered the owners of U.S. patents, unless assigned, and there may be a con-tractual or implied duty to assign (and similarly for trade secrets). Inventions made involving U.S. federal funding or state university research may have own-ership restrictions.

A survey of U.S. patents and pub-lished applications shows much recent activity in areas of interest to readers. In one major U.S. patent class/subclass for cellulosic ethanol, there were 11 patents issued and 45 patent applications pub-lished in 2009 alone. There are numerous other patent class/subclass groupings in related technology areas. The situation internationally is similar. And while it can’t be tracked as patents are, trade se-cret activity is likely very high as well. EP

Charles R. Richard is a patent attorney and attorney-at-law based in Washington, D.C. Reach him at [email protected] or www.crichardlaw.com.

INTELLECTUAL PROPERTY. BY CHARLES R. RICHARD

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Dust Control Systems

MAC Equipment, Inc.816-891-9300 www.macequipment.com

Fermentors

WINBCO Tank Company641-683-1855 www.winbco.com

Filtration Equipment

Fluid Engineering814-453-5014 www.fl uideng.com

Fractionation-Corn

Buhler Inc.763-847-9900 www.buhlergroup.com/us

Cereal Process Technologies217-779-2595 www.cerealprocess.com

Crown Iron Works651-639-8900 www.crowniron.com


MOR Technology, LLC618-522-8324 www.mortechnology.com

Grain Handling & Storage

McC, Inc.763-477-4774 www.mccormickconstruction.com

Instrumentation


Insulator

Miller Insulation Co., INC701-297-8813 www.millerinsulation.com

Laboratory-Equipment


Laboratory-Testing Services

Midwest Laboratories, Inc.402-829-9877 www.midwestlabs.com

Loading Equipment

Carbis, Inc.800-845-2387 www.carbis.net

Determan Brownie, Inc.800-835-6074 www.determan.com

Maintenance Software


Moisture Analyzers


Molecular Sieves

Grace Davison Renewable Technologies410-531-8731 www.gracebiofuels.com


Industrial Services


Waste Transporation




313-841-5800 24-Hour Service: 800-992-9118

www.iisgllc.com

Custom Rotary Driers for DDGS & Biomass Feedstocks

Visit Buhler Aeroglide atwww.aeroglide.com/ethanol

or call +1 919-851-2000


EPM MARKETPLACE

Parts & Services


Process Control


VFTechnical Services, LLC423-794-6747 www.vftechserv.com

Productivity Enhancements


Pumps

PeopleFlo Manufacturing847-929-4774 www.peoplefl o.com

Valley Equipment Co. Inc.423-753-3541 www.valleyequipment.com

QA Test Products


Scales-Truck

Weigh-Tec Inc.1-800-461-4153 www.truck-scales.com

Tanks

Agra Industries, Inc.715-536-9584 www.agraind.com

ATEC Steel620-856-3488 www.atecsteel.com

Spokane Industries Inc.509-921-8868 www.spokanemetalproducts.com

Thermal Oxidizers

Pro-Environmental, Inc.909-989-3010 www.pro-env.com

Valves

Check-All Valve Mfg. Co.515-224-2301 www.checkall.com

Wastewater Treatment Services

ADI Systems Inc.1-506-452-7307 www.adisystemsinc.com



UEM, Inc.561-385-7515 www.uemgroup.com

Yield Enhancement

EdneiQ, Inc.310-592-4158 www.EdeniQ.com

FinanceAppraisals

Natwick Associates Appraisal Services800-279-4757 www.natwick.com

Due Diligence


Insurance

ERI Solutions, Inc.316-927-4294 erisolutions.com

EPM MARKETPLACE

With all contact information placed in one convenient location, Ethanol Producer Magazine not only con-tains top editorial content but also a useful directory in each publica-tion. Whether a fi rst-time adver-tiser wanting to raise awareness of your business or a frequent dis-play advertiser looking for added exposure, EPM Marketplace is the perfect solution.

ADI’s waste-to-energy systemsproduce renewable energy to offset electrical and natural gas expenses.

www.adisystemsinc.comADI Systems Inc. 1.800.561.2831 [email protected]

Water reuse/reclamation

Biogas recovery, scrubbing and utilization systems

Eliminate surcharges and meet stringent effluent limits

The Source for Waste-to-Energy Systems

78 ETHANOL PRODUCER MAGAZINE April 2010

EPM MARKETPLACE

Mergers & Acquisitions

Moglia Advisors847-884-8282 www.mogliaadvisors.com

Legal ServicesAttorneys

BrownWinick Law Firm515-242-2400 www.biofuellawyers.com

WOHLSIFER & ASSOCIATES, P.A.850-219-8888 www.wohlsifer.com

MarketingFuel Ethanol

CHS Renewable Fuels651-355-6271 www.chsinc.com

Market Data

Miscellaneous

Maas Companies507-424-2640 www.maascompanies.com

Nelson Ink Promotional Products218-222-3831 www.nelsonink.com

Research & DevelopmentDynamometer Testing

Roush Industries734-779-7736 www.roush.com

TransportationMarine

Odin Marine, Inc.203-969-3400 www.odingroup.com

Rail

Ameritrack RailRoad Contractors, Inc.765-659-2111 www.ameritrackrailroad.com

Rail Consulting

Rail Safe Training, Inc.712-212-4145 www.railsafetraining.com

Railcar Parts

Salco Products, Inc.630-783-2570 www.salcoproducts.com

Industrial Safety


Waste Transporation




313-841-5800 24-Hour Service: 800-992-9118

www.iisgllc.com

www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.co

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WE ARE GROWTH ENERGY.YOU ARE, TOO.

Growth Energy means business. We’ve taken a forceful stand on the food industry’s “food vs. fuel” smear

campaign. Now we’ve set our sights on a bigger goal: raising the regulatory cap on ethanol. This work

won’t be easy. But together, we can grow our industry to where it needs to be, helping our nation become

energy independent while creating jobs at home and a cleaner environment for future generations.

Ethanol is clean, green, high-tech and homegrown. Help spread this word to opinion leaders, policy makers

and Americans from coast to coast. Go to GrowthEnergy.org today and see how you can get involved.

Together, we can keep ethanol growing.

WE’RE A GROUP OF LEADING ETHANOL COMPANIES DEDICATED TO FUELING

AND FEEDING THE WORLD THROUGH ETHANOL AND AGRICULTURE.

GrowthEnergy.org

Growth Energy means business. We led the ght against the food industry’s “food vs. fuel” smear

campaign. And we are leading the effort to raise the regulatory cap on ethanol. It is not easy work. But

together, we can grow our industry, help our nation become energy independent and create jobs while

cleaning the environment for our children and grandchildren.

Ethanol is clean, green, high-tech and homegrown. Help spread this word to opinion leaders, policy

makers and Americans from coast to coast. Go to GrowthEnergy.org today and see how you can get

involved. Together, we can keep ethanol growing.

april 2010 ethanol producer magazine

Documents

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ethanol producers

grand forks